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When a court grants a decree of divorce, it will also address the parties’ rights concerning the assets they acquired during their marriage, including retirement assets such as 401(k) accounts, IRAs, and pensions.
While the Utah court decree deals with each person’s rights to retirement assets, a separate order from the court is often required to effectuate the actual Division of Retirement in divorce. This separate order is sometimes called a Qualified Domestic Relations Order or QDRO.
Once signed by the judge, the QDRO acts as an instruction to the account administrator to divide the retirement account by the terms of the divorce decree. This is usually done by splitting the retirement into two separate accounts, one for each party. Splitting the account through a QDRO avoids the often-heavy tax penalties associated with simply withdrawing the funds and dividing them up.
After the account has been divided (Division of Retirement) according to the QDRO, each party is typically free to do whatever they want with the retirement account, including cashing it out (subject to normal tax and/or penalties) or leaving it as is (and avoiding those taxes and/or penalties).
While some parts of a QDRO’s content are required by federal law, each account administrator has their preferred style and wording for different retirement programs. This combination of mandatory content with varying styles can make preparing a Division of Retirement in divorce and preparing a QDRO complicated and confusing.
Getting help from a divorce attorney who understands the Utah Division of Retirement will help ensure that you get the proper amount of retirement you are entitled to. A knowledgeable divorce attorney can take action to see that the divorce decree is properly implemented efficiently and cost-effectively.
Contact Burton Family Attorneys in Ogden, Utah, today to discuss your retirement division!
Contact us today for a consultation with an attorney. During the meeting, you will be advised of your options as well as the cost of pursuing each option that you have. To more efficiently serve you, we encourage you to organize pertinent documents before your initial consultation if possible.
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