People who have pensions or other retirement accounts will typically have to divide them during a divorce. While other assets are handled through the property division process, these types of accounts have special considerations. When you are splitting up a retirement or pension account, the court needs to issue a qualified domestic relations order (QDRO). This legal document is prepared by your attorney and filed with the court. It then must be approved by the plan administrator. We know this might sound like a difficult process, but we are here to help you with it.
Without the court signing off on a QDRO, you could face penalties and/or be denied access to these benefits. For example, if the account holder withdraws money without the order, there will be early withdrawal penalties that must be covered. There may also be other implications.
You have to try to balance the division of the retirement accounts with other marital assets and debts. As you negotiate your share of the community property, consider how what you receive will impact your future. It is nice to walk away with a large chunk of the assets, but if these cost you more money and don’t facilitate your position, it might not be worth it.
We realize that you probably have some questions about which are the best options for your circumstances. We are here to help you find answers that can make it easier for you to decide how to proceed. Making a list of the pros and cons of retaining each asset can often be a good place to start.