Important Things To Know About Retirement Assets And QDROs
It is easy to overlook retirement benefits when you are divorcing. Pressing financial issues, including what to do with the marital home, how to divide checking accounts and the amount of child support, are all important to your present finances. However, overlooking a nest egg can have large ramifications for your financial future.
That is why it is important to have a knowledgeable divorce lawyer on your side when you are dividing property in a divorce. Too often, one party to the divorce will not obtain all of the money he or she is entitled to.
Getting Your Fair Share Of A Retirement Asset
Outside of the marital home, a couple’s largest asset usually is a retirement account. Retirement accounts are generally subject to division in divorce, regardless of where the source of the income originated. In other words, one spouse’s 401(k) is subject to division.
How To Divide A 401(k) In Divorce?
Fortunately, North Carolina allows the splitting of a 401(k) through a qualified domestic relations order, or QDRO. Through a QDRO, each party to the divorce can have a portion of a single 401(k). This division can be equal, but does not have to be. Ultimately, the apportionment of the 401(k) will depend on the full financial picture of the parties involved. A division can be either negotiated between the parties or court-ordered.
In addition, this division can be distributed in three ways:
- All of the funds can remain in one 401(k) and be subject to division upon retirement.
- One party can roll a portion of the retirement account into a separate account.
- One party can take a one-time cash settlement.
Which method is appropriate will depend on your current and future financial needs.
Questions Regarding Retirement Assets In Divorce? We Have Answers.
If you are contemplating divorce and have questions regarding property division, contact us at 910-338-5559, or fill out this brief online contact form to speak to a knowledgeable Wilmington divorce attorney. We respond promptly to inquiries.