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Who decides how retirement accounts are divided in divorce?

Setting money aside for retirement is something that many married couples do together. They likely plan for a joint budget and consider the income of both spouses when figuring out how much they can save.

Retirement accounts can quickly become a source of contention in a divorce. Each spouse likely wants the lion’s share of the account’s value. No matter how people argue and fight over retirement benefits, it is likely that at least the amount accrued during the marriage will be split up in the divorce.

Unless you have a marital agreement protecting retirement assets, they are subject to division. How do you split a retirement account with your spouse in a divorce?

When do the courts decide?

Unless you file an uncontested divorce, the judge will be the one who decides exactly how to split the account itself. They will look at other property division decisions and earning potential of each spot with the time of along with other factors. Once they decide the percentage of the retirement savings that each spouse should receive, they will include that in the property division order for the divorce.

An attorney drafts a special document

If you just go to the plan administrator managing a retirement account and have them divide the account, you could lose a significant amount of its value in fees and taxes. If the courts order the division as part of the divorce, you can avoid losing part of the retirement account.

One of the attorneys involved in the divorce will draft a Qualified Domestic Relations Order (QDRO). This document, after approval by the court, will allow for the division of the account without penalties.

If you have to split retirement savings or other complex assets in your divorce, learning more about state law and divorce precedent can help you navigate this complicated process.