Many Maryland residents going through a divorce have seen firsthand some of the frustrations it can bring. A challenging situation that some face pertains to retirement savings. For many, divorce means having to share retirement plan assets. In other cases, it could mean that retirement assets are awarded to a single party.
Whether an individual is facing the loss of some of their retirement funds or they stand to gain after divorce, it is good for them to have clear in mind some of the laws pertaining to asset division after divorce. There is no way to perfectly predict the outcome of divorce proceedings. While some may argue that it is simply a matter of money, many who have gone through a divorce understand the emotional issues attached to who gets what after a divorce.
Even if a divorcing couple has decided that they are going to divide all of their retirement assets at the same percentage, it’s still good to understand the different terms used when dividing assets. For example, when IRAs are divided, it is referred to as a transfer incident to divorce. However, when talking about a 401(k), it is a qualified domestic relations order.
Divorcing couples may want to have a firm understanding of these terms as they will impact the taxes that need to be paid on the division of retirement accounts. There are reports of some cases where the courts confuse the distinction between different retirement account divisions. This can lead to some financial frustration for all parties involved.
Divorce is a legal procedure that can be complicated, especially when there are a number of assets that need to be divided. Some divorcing individuals have seen it beneficial to discuss their situation with a family law attorney. An attorney may be able to provide insight on issues like property division, selling or keeping the marital home and other financial issues connected to divorce.