Retirement assets are one of the most fought over assets in divorce proceedings. Married couples devote considerable time to building a retirement plan. Throughout their working years, they make investments, have 401(k)s, and pensions. Retirement is why you work, and a retirement plan allows you to spend your golden years doing things you would have preferred doing while you were working. Going on a cruise or spending time with your loved ones can all be possible if you do things right.
Unfortunately, it doesn’t always happen quite like that. Yes, you may retire and do some really great things, but maybe not together. It is possible that couples will actually divorce before they retire. At this time, they must divide the assets that were accumulated during their marriage. This includes retirement assets. These are likely a couple’s most valuable assets so things get a little sticky.
Not all retirement assets are created equal, so they are not divided the same way or treated the same way. One example is a 401(k) or workplace pension plan. If part of this is awarded to the other spouse, they can only be accessed by executing a QDRO. A QDRO (qualified domestic relations order) is a legal document that must be drawn up by an attorney. This would need to be done for each QDRO to ensure that it is done properly.
A QDRO and divorce decree should state what percentage of an asset is to be awarded. This has dealt primarily with 401 (k)s and QDROs. There is still the issue of transferring joint IRAs without getting taxed or penalized. This article mainly goes to show that dividing assets, especially retirement assets, during a divorce is a complicated process. Luckily there are professionals who do this every day that can make sure everything goes smoothly.
Farbod Majd Esq.
Divorce Attorney w/ offices in Beverly Hills/Los Angeles
Services in English, Turkish, and Farsi/Persian (Iranian/American Lawyer)
8383 Wilshire Blvd Suite 646, Beverly Hills, CA 90211
310.956.4600 | Fax: 310.878.8989 | [email protected]