What Happens to My Retirement Accounts When I Get Divorced?
Once you have made the difficult decision to divorce, one of the most important decisions you face is how to divide the marital property, including pension and retirement benefits. These accounts can be quite large in many marriages, especially long-term ones. When the parties are divorcing, they wonder how they can split up the retirement accounts or if it is even possible. Rhode Island is an equitable distribution state, which means that all property of the parties is distributed equitably, but not necessarily equally.
To divide retirement accounts in a divorce, a Qualified Domestic Relations Order (QDRO) is needed for tax purposes. A QDRO is an order for the equitable division of retirement accounts, including a pension, 401(k) plan, 403(b) plan, individual retirement account (IRA), defined benefit plan, defined contribution plan or stock options.
A QDRO is typically drafted by your divorce lawyer to separate the portion of the retirement account that is awarded to the non-owner spouse. This non-owner spouse’s portion is then transferred to another qualified account in that person’s name. Once the plan administrator has approved the QDRO, it goes to the family court for final approval. The order is then sent back to the plan administrator for implementation and the funds are divided between the spouses.
The retirement accounts in your marriage can be equitably divided with a little help, and our seasoned Rhode Island division of assets attorneys can help protect your interests.