Divorces are complicated. Between dividing things like home furnishings and cars and deciding on parenting time and child support, one more thing to consider is what to do with what each party has saved for their retirement, assuming it was not accounted for in a prenuptial agreement.
Retirement accounts like 401(k)s, Roth IRAs, or Employee Stock Ownership Plans are in the name of one individual but what was contributed during the marriage can be divided between both of you. Essentially, a qualified valuator looks at what was added while you were married. That value is then considered part of the marital estate.
If you are a party who is to receive these funds during a divorce, an attorney must prepare a Qualified Domestic Relations Order (QDRO) and submit it to the financial institution managing the retirement account. Your portion is then transferred to a retirement account in your own name. This keeps you from facing tax consequences associated with early withdrawal.
If you have questions about your retirement account or your spouse’s, the attorneys at Ruppert & Schaefer, P.C. can advise you. To make an appointment with one of our lawyers, call 317-660-8150.