There are many assets that have to be addressed during a divorce. Anything that you amassed during the course of your marriage is subject to division if you split up. While most couples think about splitting things like the house and their vehicles, there’s another major asset that’s involved in some divorces: A spouse’s retirement accounts.
It’s possible that both parties may have their own retirement accounts. If these have a similar value, each person might just walk away with their own account. But, when only one party has a retirement account or if there is a big discrepancy between the accounts, it might not be so easy to figure out what to do with the account.
Considerations for dividing retirement accounts
Some accounts have a current value that you can consider when you’re dividing them. These include accounts like 401k accounts. Other accounts are based on future payouts. These, including pension plans, can be much more complex to divide.
Because of the penalties and tax implications that are possible when you divide a retirement account, you’ll need a court order so you can eliminate or reduce what you’ll be responsible for due to the split. An example of this is getting the court to issue a qualified domestic relations order, or QDRO, that outlines how the plan must be divided.
No matter what type of assets you have or their value, you should ensure that you understand the options when it comes to property division in your divorce. This can help you to determine what decisions are in your best interests as you embark on your future.