Although retirement assets can be significant, they are often something that couples don’t think much about until they are closer to retirement or considering divorce.
In the latter situation, both members of the couple may feel concerned about what happens to the 401(k), Individual Retirement Account (IRA), deferred compensation plans, or profit-sharing plans that each of them holds separately.
It’s a good idea to contact an Atlanta divorce lawyer as early in the process as possible to discuss this and other family law matters.
Common concerns regarding retirement assets
The person with greater retirement assets may worry about losing them and the spouse with fewer individual assets may worry about losing the income that he or she depended on for retirement.
Georgia law states that any portion of retirement income earned during the marriage is marital property. As such, the court can divide it according to the law of equitable division enforced here.
Equitable division does not necessarily mean a 50-50 split. Instead, a judge divides retirement and other assets in a manner that they feel is fair.
Having a divorce lawyer represent you during this process is the best way to ensure that you receive as much of the retirement assets as possible.
Considerations of family law judges when dividing retirement assets
A family law judge takes several factors into consideration when determining what makes an equitable division of retirement assets.
Some of these includes:
- Contributions, if any, made by the spouse who did not earn the retirement benefits.
- The length of the marriage and how many years one of the spouses made contributions to retirement accounts.
- How much the spouse who did not earn the retirement funds expected to rely on these funds at the time of his or her own retirement.
You should be aware that Georgia judges have wide discretion when it comes to determining an equitable division of assets.
That means the judge in your case may award 100 percent of the retirement funds to the spouse who earned them and 0 percent to the non-earning spouse. However, this is unlikely to happen in a situation where little or no other assets changed ownership.
The goal is to not make the division grossly unfair to one party. A divorce lawyer arguing for you can make a significant difference on the outcome.
Unique rules for 401(K), IRA, and similar types of retirement accounts
If you or your spouse have an IRA account, it is typically the easiest to divide upon divorce.
One party would simply roll a portion of the existing account into a new IRA for the spouse. 401(k) and other types of pension plans get more complicated. That is because a judge cannot simply divide them.
You or your spouse will need to obtain a Qualified Domestic Relations Order (QDRO) from the judge at the finalization of your divorce. He or she will then use this document to make an equitable division.