Indiana residents who have decided to get divorced will need to divide their assets, including retirement accounts. This can create anxiety, particularly as people worry about their financial stability after retirement. While each case is different, unless there is a prenup in place, the court will usually set how the retirement accounts of divorcing couples will be divided as retirement account savings are considered marital property.
Courts do not always Divide retirement accounts equally. Instead, it may be determined by how much each person earned. Another factor will be how much money one put into their spouse’s IRA. This particular amount will be deducted from the amount that they’ll need to share with their ex-spouse from the retirement accounts. As divorce proceedings are beginning, a QDRO, or Qualified Domestic Relations Order should be obtained from the court. This order is taken to the spouse’s employer to allow their retirement administrator to transfer the funds set by the court to their own retirement account without any penalties. It is a good idea to do this as early as possible because a person can cash out their retirement account before the divorce process happens and leave their ex-spouse without anything.
Couples can also negotiate cash settlements for the entire sum of the retirement savings. However, cashing out retirement accounts is generally not a good idea since it will lead to heavy penalties.
Divorce can be a delicate process for a couple. That’s why a soon-to-be ex could benefit from the guidance and support a family law attorney. Legal counsel could offer advice about planning for the future and representation during negotiations and court appearances.
