When getting divorced, one of the most contested issues couples are confronted with is the division of assets. Division of assets, also known as property distribution, is the process of dividing a couple’s marital property. Essentially, marital property refers to any assets that were accumulated during the marriage. Many couples wonder whether their retirement benefits are considered marital property and are up for division during the process of property distribution. Please continue to follow along to learn whether your spouse can receive a portion of your retirement in a divorce. In addition, keep reading to learn how a skilled Memphis, Tennessee Property Division Lawyer can help you protect your hard-earned assets.
How are retirement accounts handled in a divorce?
Tennessee is an equitable distribution state. This means a couple’s marital property will be divided fairly between both parties, but that does not necessarily mean a 50/50 split. As mentioned above, marital property is any assets that were accumulated during the marriage. With that being said if a retirement plan was acquired during the marriage, the court will consider it marital property. Therefore, a spouse can receive their spouse’s retirement benefits. However, a non-earning spouse is only entitled to a portion of the retirement account. During the division of assets an IRA, 401k, 403b, 457, or any other type of qualified retirement plan can be divided between both parties. Ultiamtely, an individual can receive a portion of their spouse’s retirement fund in a divorce.
What is a Qualified Domestic Relations Order (QDRO)?
In most cases when a retirement account is divided, a Qualified Domestic Relations Order (QDRO) must be filed. Essentially, a QDRO is a legal decree that requires that a portion of a retirement plan be assigned or paid to a spouse during a divorce. A QDRO order can require a portion of an individual’s retirement funds to pay child support, alimony, or marital property rights to a spouse or other dependent of a retirement plan. QDROs can help couples avoid tax consequences and help them decide how they want the money divided. It is imperative to note that QDROs are typically used to split qualified employer-sponsored retirement plans such as 401k, 403b, and 457. A QDRO is not usually used to split an IRA. Moreover, a couple who wishes to protect their retirement funds should consult an experienced Memphis, Tennessee property division lawyer who can help them protect their retirement benefits during the divorce process.
For more information on how retirement benefits are handled during a divorce, please don’t hesitate to reach out to one of our skilled and dedicated team members. Our firm is committed to helping our clients protect their hard-earned retirement funds during a divorce. Allow our firm to help you navigate the complexities of the process of property distribution.