While a couple may decide that a divorce is the best thing for their relationship, a divorce proceeding can lead to a lot of disputes. Even in the best circumstances there tends to be disagreements over who will get what marital property, who will pay marital debts, how will the children be cared for, and if any spousal payments will be made. These kinds of issues can create a rather contentious divorce if they are not agreed upon amicably, and can leave one or both sides quite angered by the time the divorce decree is finally granted.
Working with a divorce attorney is the best way to ensure that when the marriage is over and the divorce is finalized, both parties feel as if their needs were met. To get in contact with JacksonWhite’s family law team either fill out a form online or give us a call at (480) 467-4348.
Dividing Up Marital Assets
If there is a large amount of property involved, such as a house, vacation home, boat, cars, and other valuable assets, the divorcing couple needs to decide who will receive what. If the two parties are unable to do so, then the decision will be up to the courts to decide.
There are situations where a judge may decide that it wouldn’t be fair for either party to receive the asset, but instead make the asset be liquidated and the money divided fairly. When a divorcing couple decides to do this on their own, it is referred to as a quitclaim deed.
In some instances, courts may order that the two sides sell vacation properties they have, and then equally divide the proceeds from that sale. This makes sure that each side feels like they have gained their fair share from the sale, and that neither gained an unfair advantage over the other. It’s as close to a perfect decision as possible.
Dividing Up Retirement Plans
While assets and their division is a more tangible job for the courts, one area that is not often divided is an ex-spouse’s retirement plan. If a couple has been married for a significant number of years, usually 10 or more, where a retirement is included as part of the one spouse’s job or retirement plan, the court may find that the other spouse is entitled to a portion of that retirement plan.
This is often the case where one spouse has been the breadwinner and the other has been a stay-at-home parent who has cared for the children and kept the household. Because it has been the responsibility of the parent who stayed home to maintain the household, but they have not had income of their own, the court will often view that retirement account as equally shared by both. The spouse who worked was able to do so because the other spouse sacrificed by doing all of the other things to keep the household in order.
But how does a spouse seek to gain a portion of that retirement account? This is where the QDRO comes into play.
What is a QDRO
The QDRO stands for qualified domestic relations order. This is a legal court order which is used to help divide up specific types of retirement plans, which include such things as pensions, 401(k)s, and IRA accounts, granting the spouse that was not the owner of the account a portion of the funds within the account.
You are not required to file for the QDRO as part of the divorce. This is even true if your soon-to-be-ex-spouse has a great deal of money. As part of the property settlement you should include the pension and its assets as part of your request.
Government pensions however (such as military), are often subject to different laws in different states. This is usually not covered by the QDRO because these kinds of pensions are not viewed as property.
How Access to the Retirement Plan Can Be Acquired
In any divorce proceeding, both sides identify specific assets that need to be divided. This includes retirement plans. The court will try to see if both parties can agree upon the division of property, which usually occurs during settlement negotiations.
As part of the settlement negotiations the retirement account should be included. This means that the non-account owning spouse can request a portion of that retirement as part of the settlement. You should be aware that if you cannot reach a settlement on this issue, the judge is likely to award the one spouse a portion of that retirement plan. To the court, they will see this as a fair gesture.
If the court agrees that the retirement plan should be divided, you should be aware that you will have no means by which you can intervene to try to stop that. The court will directly contact the pension plan administrator and inform them of the decision of the court by giving them the QDRO. The administrator is then responsible to adhering to the court order, and the money will be removed and turned over to the spouse by the direction of the judge or other court officer.