When you get divorced, you and your spouse must divide your marital assets. This includes retirement accounts, such as your 401K. The question is whether your Macon divorce attorney can demand half of your spouse’s 401K account on your behalf.
So read on to find out how retirement accounts are divided in a divorce. We will also discuss how much, if any, of your spouse’s 401K you can receive.
How Are 401K Accounts Treated in a Divorce?
When you file for divorce, you must disclose all your debts and assets to the court. Since a copy of your Case Information Statement will be served on your spouse (or their attorney), they’ll know what assets you’re claiming as well.
Both your divorce attorney and your spouse’s lawyer will see the complete list of marital assets.
Of course, there will be instances where one of you argues that certain assets should not be included in the marital asset pool. It will all come down to whether the asset was acquired, accrued, or improved upon during the marriage.
Generally, if you or your spouse opened a 401K or contributed to one through work during your marriage, it will be considered a marital asset. This means it will be subject to division during a divorce.
Are There Situations in Which a 401K Will Be Exempt from Equitable Distribution?
Let us examine some situations when a 401K account may not be deemed a marital asset. First, you may have a prenuptial agreement that keeps your 401K from becoming marital property.
Secondly, if the account was opened prior to marrying your spouse, any contributions made before marriage will still be separate property and won’t be subject to division.
Finally, if you were gifted the money you invested in your 401K, it will remain yours after the divorce. The same is true for money in your 401K that came from a family inheritance.
What Factors Affect Equitable Distribution in Georgia?
Georgia is an equitable distribution state. Assets acquired during the marriage are divided between spouses in a fair and equitable manner.
Fair and equitable doesn’t necessarily mean that assets will be split evenly between the two spouses. When the judge decides whether to divide certain assets, they’ll take several factors into account.
Some of these factors include:
- How long were the parties married?
- How much did each spouse contribute to the marriage?
- What is your spouse’s earning capacity in relation to your own
- Were either of you married before, and did you have children prior to the marriage?
- What physical health are the two spouses in?
- The ages of each spouse
- The couple’s standard of living during the marriage
- Whether one spouse sacrificed career opportunities
For instance, if one spouse is significantly older than the other, the court may order that the younger spouse receive a greater share of the retirement account.
Dividing a 401K With a QDRO
Your divorce lawyer in Macon can help you negotiate an agreement with your spouse concerning the division of assets. The court must approve the divorce settlement.
One option is to split a 401K using a QDRO. A QDRO, or Qualified Domestic Relations Order, is an order directed toward the administrator of the retirement plan instructing them to pay a part or the entirety of the plan to the holder’s spouse.
Once the QDRO is completed, you have a few options:
- Leave the money in the account as is.
- Complete a one-time penalty-free cash withdrawal of some or all of your share.
- Roll your share over into an IRA.
Tell your divorce attorney how you want to proceed, and they’ll include this in the marital settlement agreement.
Your Macon divorce attorney can help you negotiate an agreement with your spouse about how assets should be divided. The court must approve this divorce settlement.
Alternatives to Splitting a 401K During Divorce
There are times when it doesn’t make sense to cash out both 401K accounts only to turn around and split them. Oftentimes, both parties want to keep their 401K and find some other way to pay their spouse.
For example, if your spouse has a 401K, your Macon divorce attorney can help you offset that by requesting assets of comparable value, such as the family home.
Reach Out to an Experienced Divorce Lawyer in Macon Today
If you’re getting divorced and are worried that you won’t get your fair share of your marital assets, you’re not alone. A lot of people hire Macon divorce attorneys for this very reason.
The good news is that your attorney will do whatever they can to resolve the division of assets with your spouse’s divorce lawyer. It is often easier to negotiate with an attorney as opposed to their client.
If you’re ready to stand up for yourself and protect your interests during a divorce, contact our office at 229-210-6226.