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Attorney Christopher T. Adams

Trusted Attorney Providing Knowledgeable And Dedicated Representation

What happens to retirement savings in a Georgia divorce?

Divorce will typically have significant implications for someone’s financial future. Most people preparing for divorce in Georgia will worry about their finances both during and after divorce. People know that seeking divorce is expensive and that they will have to share their resources with their spouses.

The most valuable marital property will often become the focal point of divorce negotiations. Many people worry the most about real property or business holdings. Married couples will often also share financial resources, including retirement savings. It is common for both working spouses in a high-asset marriage to have their own retirement savings.

Are retirement resources at risk in a Georgia divorce?

Spouses often need to split retirement savings

Some couples already have clear protections in place for their retirement savings. Those who have negotiated a marital agreement may know exactly what will become of their retirement savings because they set those terms before getting married. Others are uncertain about what would happen with their retirement resources.

Often, retirement savings accounts are in the name of just one spouse. Many people save for retirement using accounts associated with their employment. Simply having retirement savings in a separate account does not automatically make those resources separate property for the purpose of divorce. The amount added to the account during marriage is probably marital property that is subject to division. People may have to calculate what portion of the account is marital and what will be separate property. They then need to negotiate with their spouses about dividing the account.

Sometimes, one spouse will accept other property to offset the value of marital resources. If such arrangements are not feasible, then the spouses may need to put together a qualified domestic relations order (QDRO). A QDRO is a document drafted by one of the lawyers to reflect the property division settlement.

The details of the QDRO will facilitate the penalty-free division of retirement savings. When properly filed, a QDRO allows spouses to divide the balance of a retirement account into two separate accounts in accordance with the property division decree. They can avoid early withdrawal penalties including taxes and fees using a QDRO. In other words, while the division of the account may be necessary, losing some of its value to early withdrawal penalties is not.

Learning more about how to handle major resources during divorce may help people preserve their financial stability even as their circumstances change.


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