When people divorce, pensions and employer-sponsored retirement funds such as 401k accounts could be part of the marital property. Dividing these plans between spouses is often a difficult part of the dissolution process.
Once you and your spouse agree on an equitable division, you must take specific steps to make sure the retirement funds are distributed according to your agreement. One of those steps is ensuring the plan gets a legal notification called a Qualified Domestic Relations Order (QDRO).
Sometimes couples overlook the QDRO, and that could lead to problems later. A Johns Creek Qualified Domestic Relations Order lawyer can ensure that the plan administrator has the legally binding documentation required to distribute the marital property in a pension or retirement fund according to your agreement. Reach out to our team of knowledgeable division of assets attorneys today to learn more.
When splitting a couple’s assets during a divorce, anything that couple acquired while married is considered marital property. This includes the income that a spouse puts into a retirement account or that their employer contributes to a pension plan.
Dividing these accounts can be complicated. There are tax implications with taking the money out early. In many cases, couples and their attorneys can find ways of distributing marital property so that each gets a fair share of the assets without having to divide retirement or pension plans. For example, the spouse with the retirement account might allow the other to keep the family home and a larger share of the other property in exchange for not splitting the retirement funds.
If both parties cannot achieve an agreeable division without dividing a retirement account, they will need a QDRO instructing the plan administrator on how to disburse the funds. A Johns Creek attorney with experience drafting QDROs can help with this process.
When divorcing couples decide to divide a retirement plan, Georgia family courts will incorporate that agreement into the divorce decree. However, the decree is not always enough to allow a plan to pay out funds to someone other than the named account holder.
A Johns Creek attorney will need to draft a Domestic Relations Order (DRO) directing the plan to pay some of the funds to the other spouse. The DRO will provide information about how much should go to the other individual and when to pay it. Most plan administrators have specific requirements regarding the contents of these orders, so if there are multiple accounts, the parties might need multiple DROs.
Once the DRO is drafted, both individuals will sign it, and a legal representative will submit it to the family court. Georgia courts will certify it and then forward it to the plan administrator for approval. Once a DRO is approved, it becomes a QDRO, and the plan administrator has a legal obligation to follow it.
If retirement funds are part of your divorce’s marital property division agreement, you should reach out to a Johns Creek Qualified Domestic Relations Order lawyer. Although not all circumstances require a QDRO, if you need one and do not have one, the account might not be divided the way you and your spouse agreed.
An attorney with experience handling the financial side of divorce can provide invaluable assistance. Call our firm today to schedule an appointment with a qualified member of our team.