Divorce is a significant life event that can drastically impact the futures of everyone involved. Child support and alimony, child custody and visitation, and property division can all set new boundaries on how you live your life after divorce. Divorce can change many things in a person’s life, so how does it impact your retirement plans?
Divorce is a complicated matter that often calls for an experienced family law attorney to protect your best interests. While lawyers can certainly make things easier for a spouse facing divorce, it is also beneficial to know what to expect from a divorce and how it will impact your retirement accounts.
What you should expect
When it comes to property division during a divorce, any property or asset gained during the marriage usually qualifies as “marital assets.” these assets are generally what property division looks at during a divorce. Assets that each spouse had before their marriage are often known as “personal assets,” and they are not commonly involved in property division.
What can make retirement account division challenging is that a spouse may have been developing a retirement account before their marriage and during the marriage, which can make a retirement account a hybrid of both a personal and marriage asset.
It can take a lot of work, but once both parties agree to how to split a retirement account, they will then create a document known as a qualified domestic relation order (QDRO). A QDRO will then go to the financial institution holding the retirement account, and the institution will divide the account as the document specifies. After the division, each spouse will only have access to their share of the retirement account.
Prepare for your division
If you are facing a divorce and are concerned about what will happen to your retirement account, talk to an attorney. It is better to discuss your options with a lawyer about the account than to try to hide the account from your divorce. A lawyer can help you earn the best possible outcome in your divorce, so make sure you rely on their experience.