It is important to pay close attention to retirement accounts in a divorce in North County or Carlsbad. For many California couples who decide to divorce, their retirement accounts represent the largest single asset of the marriage and are of critical importance to both parties’ financial futures. This is one reason that over 62 percent of divorce lawyers in a recent survey reported that retirement funds were one of the most contentious issues dealt with by their clients. The division of these funds can have a significant effect on both people’s lives.
However, the complexity involved in dealing with retirement accounts as part of a property division settlement in a divorce isn’t limited to the difficulties a divorcing couple may have in reaching an agreement. Because these accounts are governed by an array of legal and financial regulations, the distribution must be carried out properly. When retirement funds are handled incorrectly during a divorce, it can cost both parties significant sums in taxes, penalties and fees.
You will need to pay close attention to retirement accounts in a divorce and prepare a strong plan going in to initial negotiations. A qualified domestic relations order or QDRO must be issued by the court in order to divide a retirement account. Despite the fact that its contents reflect the divorce settlement, it is not issued automatically with the divorce decree and must be specifically requested. A QDRO is necessary whether the retirement account is a traditional pension plan or a 401(k) fund; and for every retirement account being divided, a separate QDRO must be issued.
If possible, a QDRO should specify distribution by percentages rather than by dollar amounts as the value of the account can fluctuate due to changes in the stocks or mutual funds in which it is invested.
The Certified Family Law Specialists at Burke & Domercq with help you to pay close attention to retirement accounts in a divorce in North County or Carlsbad. We provide insight into crucial community property negotiations and help you to accomplish your goals while achieving the best possible outcome in your divorce. We invite you to review the strong recommendations of our clients and the legal industry and contact us or call 760-434-3330 to learn more and schedule an appointment.