It is reasonable to believe that a court order distributing assets is all you need to collect your share of your ex’s retirement funds after a divorce. However, this is not always the case. If you are divorcing and either you or your spouse has a pension or retirement fund, you should ask a seasoned property division attorney whether you need a Qualified Domestic Relations Order (QDRO). These documents let fund administrators know that someone other than the plan participant should receive a portion of the money.
A Crabapple Qualified Domestic Relations Order lawyer can file the proper paperwork to ensure you get your distribution as agreed. Contact our firm to learn more or to schedule a free consultation with one of our qualified team members.
One of the most time-consuming tasks in the divorce process is dividing marital property. The assets a spouse had when they entered marriage, and any they acquired by gift of a third party or inheritance during the union, is their personal property. Any property the spouses acquired during the marriage, including gifts to each other, is considered marital property.
In addition, the money that a spouse had in a pension or qualified retirement account upon marriage is a personal asset, but the money they contributed to this account during the marriage is a marital asset. Georgia law requires couples to divide marital property equitably. However, this does not mean that each spouse gets half the value. Instead, it requires that the division be fair under the circumstances.
Pensions and retirement accounts can be difficult to divide and allocate because, in many cases, it will be years before either spouse can access the funds. Georgia courts often handle this by setting aside a portion of the retirement account for the other spouse’s benefit. A practiced Crabapple QDRO attorney can further explain how these accounts contribute to the marital property to ensure an adequate understanding of potential distribution.
A federal law called the Employee Retirement Income Security Act governs pension plans and retirement funds. To protect these funds from fraud and theft, one provision of the law forbids a fund administrator from paying money out to anyone other than the plan participant. However, the administrator could release the funds to an alternate payee if they have a Qualified Domestic Relations Order signed by a judge ordering them to do so.
People sometimes believe the easiest way to handle splitting retirement savings during a divorce is to take the money out and give their soon-to-be-former spouse their share. Although this solution might be simple, it could be expensive.
Savings and retirement accounts that do not allow immediate access to the money a depositor puts away often have tax advantages. If someone takes their money out of such a plan early, they might be liable for tax penalties. Asking a Crabapple attorney to draft a QDRO is a more cost-effective solution, and it allows the retirement funds to continue to grow in their tax-protected account. The QDRO will inform the fund administrator to release a portion of the funds on a specific date to the ex-spouse.
Retirement funds could comprise a significant portion of a couple’s assets, and dividing them fairly can get complicated. If the final divorce decree gives you the right to a portion of your ex-spouse’s retirement account, you need a QDRO to make it effective.
If you are divorced or are in the process of divorcing, consult a detailed Crabapple Qualified Domestic Relations Order lawyer for help. They can take all the necessary steps to ensure plan administrators pay out your retirement funds in accordance with your divorce agreement. Call our team at the Atlanta Divorce Law Group today.