For couples in Massachusetts or elsewhere, trying to figure out who gets to keep what during a divorce settlement can be a trying experience. It is rarely easy to decide what is worth fighting for, how much is too much or too little or what both parties consider to be a fair division of property. This is particularly true when dealing strictly with money.
Every couples' financial situation is different. Some have more accounts than others, making the dividing of funds complicated. It is important to carefully review all accounts. Leaving something out could result in one party receiving less than what they are technically able to receive.
For instance, divorcing couples cannot forget about retirement accounts when dividing financial assets. While the individual to whom the retirement account belongs may feel that money belongs strictly to him or her, that may not be the case. Spouses may be entitled to a portion of that money. This is not something that is automatically given, however. The proper request must be made, appropriate paperwork filed and distribution options considered.
There are several factors that go into dividing retirement accounts in the event of divorce, which may include the length of the marriage and individual financial needs. If such accounts are divided as part of a property division settlement, there may be tax implications depending on what one chooses to do with the distribution. A Qualified Domestic Relations Order (QDRO) can be filed, which is simply a legal order ensuring funds are distributed properly and can save the individual on the receiving end from having to pay any unnecessary taxes. This is just one of many options couples in Massachusetts have when seeking a distribution of retirement accounts as part of a divorce settlement. Legal counsel will work diligently to ensure the division of financial assets achieved is in the best interests of the client.
Source: Fox Business, "Who Gets the Retirement Accounts in a Divorce?", AJ Smith, Nov. 17, 2015