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Retirement account value matters in property division

| Apr 17, 2020 | Property Division

There are many different types of assets that you have to split up when you’re going through a divorce. Making sure that you understand some important points about this may help you to make decisions as you go through the process. One particular type of asset that must be split is retirement accounts.

Many people make the mistake of trying to split these accounts based on their current balances. This might not be the most appropriate option that you have when it’s time to work through this. You need to look at the value of the accounts. This can be very different from the current balance.

The value of the retirement accounts takes the current balance, market projections, potential tax implications and similar factors into account to give you a value. Basing the split on the value can ensure that the division is more equitable than basing it off the balance.

Once you know how the retirement accounts will be divided, you need to get a qualified domestic relations order so you don’t have to deal with penalties for moving the funds around. This order outlines who gets what and where the funds can go. It must be ordered by the court and accepted by the plan administrator. If there are issues with it, the administrator will reject the QDRO and the court will have to correct the deficiencies.

In order to end the divorce with an equitable settlement, you have to look at all the assets and debts. Making sure you protect your own interests is a priority for these cases, and your legal team can help you with this.

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