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Retirement accounts need extra attention during property division

The time has come to inventory assets and work toward finding the best possible outcomes for dividing those assets in divorce. Many New York residents have likely dreaded this part of the legal process, but property division is usually necessary when marital relationships end. Over the years, numerous items and accounts were likely accumulated, and knowing how to divvy up those assets may not always be easy.

In cases of retirement accounts, some parties may wonder whether they can even be divided. Though these funds are typically provided by an individual's employer and remain in one spouse's name, they are not exempt from property division in divorce. However, because of protective measures placed on retirement accounts, certain documents will need to be completed in order for the division to take place properly.

With 401(k) accounts, a Qualified Domestic Relations Order is needed to transfer funds. These funds can be transferred to an IRA account in order to avoid taxation and early withdrawal penalties. However, if the account being divided in an IRA, the QDRO does not apply to such accounts, but this type of account can still be subject to division.

Dividing retirement accounts and other complicated assets can sometimes prove difficult. The division may require extra steps in order to be completed, but these steps may be worth it in order to achieve the desired property division outcomes. New York residents interested in learning more about how certain accounts may be divided during divorce could find it useful to speak with knowledgeable attorneys.

Source: akronlegalnews.com, "How are employer benefits and other unique assets divided in a divorce case?," Michael C. Craven, Dec. 27, 2017

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