Dividing retirement accounts in a divorce can be a very complicated process. Parties must understand the different types of retirement benefits, and attorneys must know how to identify, value, and divide these accounts. Those attorneys who do not have an emphasis on family law issues often do not understand all of the intricacies involved in this area, and their clients often suffer as a result.
Retirement plans come in many different varieties, such as 401(k), 403(b), SEP, pension, IRA, Keogh, and ESOP, to name a few. Qualified plans, like 401(k) plans, must be allocated via a QDRO, whereas non-qualified plans, like IRAs can be divided much easier (although the exact process may vary from state to state).
Jenny McKinney wrote an article for About.com, Divorce and Retirement Benefits, in which she suggests everyone ask these questions when going through a divorce:
- How many pension plans does your spouse have?
- How much has accrued in each plan?
- What information do you need in the court order or property settlement to have the pension plan pay benefits directly to you?
- Have you worded the order so that it clearly specifies the amount that will be paid to you?
- Does the order have survivor benefits so that you will continue to receive benefits if your ex dies first?
Of course, these questions may only be the tip of the iceberg, and it is important to have an attorney who fully understands the particulars of this area of law. The details in allocating retirement accounts must be addressed before your divorce is final, so be sure to protect yourself before it’s too late.