Wage-earners contemplating a divorce sometimes think their pension accounts do not count as marital property. After all, they were the only ones contributing, so why should they divide the account?
Georgia divorce law, however, considers all types of retirement accounts marital property as long as one of the spouses contributed to it during the marriage. Funds that originated prior to the marriage generally count as separate property.
Any type of property division can become complicated, especially after a long marriage. Georgia applies the equitable division rule rather than a 50-50 split. This encourages a more flexible approach that allows the judges to consider a variety of factors and come up with a division that is most fair to both spouses.
Alternatives to splitting the account
In keeping with the principles of equitable division, in most cases, judges will not want to split up a retirement account, as doing so could raise a number of logistical issues and tax questions. Instead, a judge may award the other spouse an asset of comparable value. Even so, accurately evaluating the worth of the marital portion of a retirement account can be difficult and give rise to disputes. In some circumstances, instead of settling the retirement accounts through another asset, a judge may award additional alimony to reflect the account’s value.
Legal mechanism for account division
Sometimes courts conclude that dividing the account presents the best option. When this happens, ERISA requires a Qualified Domestic Relations Order, or QDRO, which meets the approval of the retirement plan’s administrator. Drafting the order and coming up with an appropriate mechanism for transferring the fund is generally a complex endeavor.
When a longtime couple decides to divorce, especially if they possess a high number of assets, division can complicate matters and generate disputes. An experienced and knowledgeable divorce attorney can help you figure out and attain your financial goals, protect your interests, and advise you as to the optimal legal options.