Divorce can bring a number of challenges, many of them requiring intense focus until the agreement is signed. However, there is one item that tends to go under the radar of most people: retirement accounts. This is especially true for older individuals in Washington and throughout the country who have retirement assets at stake. The following includes further information on dividing retirement assets in a divorce and the options you have at your disposal.
Marital property
Because Washington is a community property state, any property obtained during the marriage, including retirement assets, is considered marital property by the courts. This means that it’s likely you will need to give half of your retirement accounts to your former spouse.
Dividing retirement assets
In a high-asset divorce, you’re likely to see a large number of retirement assets at stake. These may include 401(k) plans and pensions. Understandably, it can be difficult and daunting to think that all your accounts can be cut in half overnight. Fortunately, you do have a few options at your disposal. Some of the options you have include offering your ex assets of equal value, liquidating the retirement accounts or simply rolling your 401(k) into an IRA.
Understanding a QDRO for an IRA
A QDRO, or qualified domestic relations order, is a separate court order that allows you to transfer retirement funds to your former spouse without the risk of being penalized by the government. During this process, it is important to have your divorce attorney at your side.
Going through a divorce can be a very complex process, especially if valuable assets such as retirement accounts are part of it. It is recommended to consider seeking an attorney’s guidance before any actions are taken to split your retirement assets.
