Divorce is never a simple procedure. The proceedings include how you and your divorcing spouse will divide the assets – and things can get murky when deciding who gets what. The same holds true if retirement plans are involved.
Your Tampa divorce lawyer will have some insight into dividing a joint retirement plan. Here are some of the basic points.
Retirement Savings and the Divorce
In most cases, if a spouse has an employer-sponsored 401(k) or pension plan, then the other spouse is entitled to part of the balance. An exception to this is if the account holder has a prenuptial agreement that states otherwise. The account holder can collect the benefits from a payout and leave the other with nothing.
If there is no prenuptial agreement involved, one can file a Qualified Domestic Relations Order. Also known as the QDRO or “quad row,” this is a court order that directs how a spouse’s pension plan must pay the divorcing spouse’s benefits. It can also be used for child support, alimony, and property rights. The QDRO provides protections and guarantees which allow a portion of a retirement plan to be withdrawn without penalty and placed in the non-employee spouse’s retirement fund.
It is important to know that QDROs only apply to IRS-qualified accounts that are covered by the ERISA. Other laws govern military or government pensions. If you require assistance in dividing the assets in an employer-sponsored 401(k), it is recommended to consult with a divorce lawyer.