Dividing assets in a divorce is one of the most complex processes, but it is a necessary step to finalize a divorce agreement. The hardest asset to divide is often retirement savings.
Without a prenuptial agreement saying otherwise, the court will expect you and your spouse to divide retirement savings. It can help for you to work with an experienced divorce attorney and to use a Qualified Domestic Relations Order.
Qualified Domestic Relations Order explained
A QDRO allows for the payment of retirement savings to your former spouse. It bypasses the legal issues that could arise if your former partner were to try to get access to your account.
You must get a QDRO from a court. It must follow specific requirements. You and your spouse do not have to agree to create the order. It is up to the judge in your case.
General handling of retirement in a divorce
The court can divide your retirement savings between you and your spouse during your divorce. It is like any other asset. However, the nature of retirement plans can make it difficult to offer a payoff right away. Many times, you will have serious penalties if you try to access the money early. Because of this, you should have a good plan in place for the division. A QRDO can help with that, but it is complicated.
Above all else, when it comes to your retirement savings division in your divorce, you must make sure you know what is happening. If you do not address the situation in your divorce decree, your former spouse could collect your savings in the future.