Dividing Retirement Accounts | Divorce Lawyer Charleston SC
One very common type of asset that people will need to divide when they go through a divorce is their retirement accounts. While this seems, and can be fairly straightforward, you will need the assistance of a divorce lawyer Charleston SC to be sure it is done appropriately.
Do we just split them in half?
Maybe. You will divide any growth that accumulated to the account during the time of your marriage. If either of you contributed to a retirement fund prior to your marriage you should be able to retain those funds as separate, non-marital property.
Can’t we just keep our own?
Again, maybe. If many cases, where the spouses have equal earning potential, their retirement accounts may also be of equal value. If this is the case it is often easier, and therefore preferred for each party to retain his or her own account.
What are some reasons that I wouldn’t get my spouse’s retirement?
In addition to your spouse having pre-marital funds that you are not entitled to receive, you may also not receive the funds because it may be offset by another asset that you do receive as part of equitable distribution. For example, if you retain the marital home and it had equal or greater equity than the value of your spouse’s retirement, that asset may offset any amount to which you would have been entitled.
How do we divide the retirement accounts?
If you do divide a retirement plan you will want to be careful to avoid paying any extra taxes on this money. This is done through a Qualified Domestic Relations Order (QDRO), which grants the benefit provider the authority to transfer funds to you and avoid certain tax implications. This is done after you have received a final order from the court and can be drafted by your attorney or a third party attorney. Since each retirement plan has its own set of rules and regulations it is important to have this drafted by someone who is familiar with the process and can communicate with the company on your behalf.