Daniel A. Lewis| Charlotte, N.C. Divorce Lawyer
401(k), 403(b), IRA, Pension, Military Retired Pay. Do these terms sound familiar? If you have one or more of these accounts, then you’ve been fortunate enough to save money specifically for retirement.
If you’ve accumulated retirement funds during your marriage, then they are subject to equitable distribution by a court if you separate from your spouse. Just because your retirement account is in your name only does not necessarily mean that your spouse is not entitled to part of it.
But how are retirement accounts divided? No, you may not simply withdraw funds from your 401(k) or other retirement account and give them to your spouse. Withdrawing funds from many types of retirement assets will cause you to incur tax liabilities and penalties on the amounts withdrawn. You may transfer retirement assets to your spouse tax free, however, upon separation and divorce.
To avoid these tax issues and to ensure retirement assets are properly divided and in accordance with federal and state laws, as well as the Internal Revenue Code, special court orders must be drafted, often called a Qualified Domestic Relations Orders (QDROs) or Domestic Relations Orders (DROs). The type of order you may need depends on the nature of the retirement account or interest to be divided. These court orders are often complex and time consuming to draft and oftentimes no two are alike.
At Hatcher Law Group, we have many years of experience in analyzing retirement assets, negotiating and litigating the distribution of these assets, and drafting the court orders necessary to properly transfer them incident to separation and divorce. If you have questions regarding retirement assets, please contact us to schedule a consultation.
Dan Lewis is a family law attorney in Charlotte, NC. In addition to complex equitable distribution and alimony cases, his practice includes divorce, child custody and child support matters.