To the extent they ever were, retirement plans are no longer a luxury reserved to really wealthy Georgia residents.
Many people in the greater Atlanta area probably have at least some money either in an employer-sponsored account like a 401(k) or in a retirement plan for individuals, such as an IRA.
A smaller number of people, including many government employees, may be receiving a retirement pension.
Frequently, especially among those approaching retirement, the value of these assets can be considerable, perhaps even exceeding the equity in a person’s home.
Like other assets, retirement plans may be marital property subject to a division in a divorce.
Specifically, any contribution to a retirement plan during the marriage, including growth, is likely to fall within the marital estate under Georgia law.
Like most states, in a divorce, Georgia courts will divide marital property in what the court deems a fair and just manner. This need not be a 50-50 split. Instead, it will depend on a number of factors.
On a purely practical level, a court may prefer not to divide a retirement plan but instead award the other spouse enough property to compensate for his or her share in it.
Resolving issues with a retirement account requires attention to detail
Handling a retirement account in a divorce is both a complicated and potentially contentious process.
It can be contentious because a lot of times, there is considerable wealth at stake. Moreover, one spouse may claim that some of the account is not marital property or that he or she is entitled to a larger share of the account.
Division is a complicated process on a number of levels. In order to avoid dividing retirement funds, both sides may have to make some difficult trade-offs and will need to be fully informed of their legal options when doing so.
Moreover, in the case of a pension, the account owner may have to rely on an expert opinion to put a value on the account.
Finally, if a couple elects to divide the account, they must do so in order to comply with federal tax laws and thereby avoid penalties. Specifically, they may have to execute and properly submit a qualified domestic relations order, or QDRO.
The QDRO is a legal document which the judge will sign and the designated administrator of the retirement plan must approve. The QDRO will describe how the administrator should divide the retirement plan.
Improperly executing a QDRO can cause delays and result in negative financial consequences.
