Stover Law Group
You Need A Skilled Lawyer On Your Side.
Free Consultations

Retirement assets require special attention during divorce

Retirement assets frequently form the largest pool of cash that divorcing couples in Tennessee need to split. According to a recent survey by the American Academy of Matrimonial Lawyers, retirement accounts represent the second most common issue that divorcing couples fight over (alimony is No. 1). Even in amicable divorces, the parties need to pay close attention to the details when dividing the funds to avoid early withdrawal fees and high income taxes.

Workplace retirement plans require a document known as a qualified domestic relations order to disburse funds. The QDRO, which emerges as part of the divorce agreement, enables a plan administrator to release funds. Ideally, the parties will set up new retirement plans to receive the funds. This is called a trustee-to-trustee transfer, and it removes the obligation to pay income taxes and fees because the money went into a new retirement account. When people need the money after the divorce, they must investigate the taxes and fees that they might owe upon receiving the cash directly.

The details of the QDRO must be precisely declared to avoid delays or unexpected taxes. Each retirement plan requires its own specific order. The terms of the order should ideally state a percentage of the funds that will be released to each party instead of a specific figure. This will prevent unintended problems if investment returns raise or lower the account balance during the divorce process.

A person who must navigate property division at the end of a marriage could gain guidance from a family law attorney. Legal advice about how to protect non-marital assets or achieve compromises with a hostile ex-partner could help prevent prolonged litigation. An attorney might also alert a client to tax obligations that arise from the sale of real estate or business assets.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Sign Up For A Free Case Evaluation

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Stover Law Group
222 2nd Ave. North, Suite 326
Nashville, TN 37201

Phone: 615-649-6278
Fax: 615-613-0546
Nashville Law Office Map