There are multiple decisions and negotiations that divorcing couples must grapple with. Many of these decisions are highly emotional, including the allocation of parental responsibilities, ownership of the family home, custody of the family pet, and even possession of sentimental personal items the couple has amassed during their time together. So many of these decisions revolve around the present that it can be easy to overlook the future issues, such as the division of retirement funds and pensions. For this matter especially, having a skilled divorce attorney assisting you can be critical.
There are many factors to consider when trying to determine how these funds will be divided, including tax implications and early withdrawal penalties if the transaction is not handled correctly. Knowing ahead of time the best way to manage each of these accounts can save a great deal of time, stress, and money.
Dividing Different Types of Retirement Accounts
Different retirement plans require different procedures for division in a divorce. Individual retirement accounts (IRA) are savings accounts that offer many tax advantages while enabling people to save for their retirement. These accounts are usually offered by financial institutions, such as banks and credit unions. Qualified plans, such as 401(k) or 403(b) plans, are employer-sponsored plans. Employees can contribute to these accounts and there are no taxes paid on the amount in the account until the employee actually makes a withdrawal....