When it comes to dividing property and assets in a divorce, one of the more contentious aspects is dividing retirement accounts. Retirement accounts often hold significant sums and can often determine the type of lifestyle you lead during your golden years. If you are in the midst of a life-altering divorce, the information contained here can help provide some answers to your important questions about how to divide these assets.
Types of retirement accounts
There are numerous types of retirement accounts, and each type of account may come with its own way of handling divorcing spouses. Whether the account is a pension or your own personal Roth IRA, you’ll want to gather all of your retirement accounts and examine the statements as you begin to prepare for your divorce.
Once you have a clearer idea of the status of your accounts, you may then begin to decide how you would like to divide the accounts. One way could be to take into consideration which spouse earned and contributed to the most to these accounts. You should also recognize any unpaid work a spouse may have done throughout the years to stay home and take care of the family.
Qualified domestic relations order
Once you have gone through the accounts, it may be time to consider a qualified domestic relations order, or QDRO. For many types of retirement assets such as 401(k)s, IRAs and pensions, a legal document is requisite when dividing the accounts. Spouses, along with their respective legal counselors, may advocate for dividing the assets to their own advantage. The QDRO then acts as a legal vehicle to ensure that the money is properly separated.
No matter where you are in your divorce process, working to ensure you get the money and assets you deserve is of paramount importance. Obtaining statements from your retirement accounts and taking the time to examine your contributions, both financial and familial, may help you get the most for your financial future.