Divorce’s impact on retirement accounts

On Behalf of | Aug 9, 2019 | Family Law |

According to Investopedia, your pension plan is not exempt from your divorce proceedings. The money that the two of you added to your respective retirement accounts or pension plans throughout the marriage counts as a marital asset. The money you entered into your account in the case of a 401(k) plan prior to your marriage is yours to keep. In Indiana, the judge can divide the retirement accounts.

Before you can withdraw money from your retirement plan to finalize your divorce, you have to have a judge sign a Qualified Domestic Relations Order. This provides approval that each spouse has a right to the money and confirms the amount that he or she is entitled to take. In addition, this order will prevent the owner of the accounts from paying taxes on an early withdrawal. In some instances, your spouse may need an order for each account that you have. The order must have specific amounts or percentages that the spouse may receive. You can also wait until you retire to take a distribution of the money.

Smart Asset suggests that you do not necessarily have to follow through with speaking to a judge. Instead, you can meet together with your former spouse to discuss your options. You always have an option to work as a couple to come to an independent agreement. It can save you time and money if you can put your differences aside to work out how to split your retirement accounts.

The above information is for educational purposes only. None of the information on splitting retirement accounts is legal advice.