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Do you have to share retirement savings in a Georgia divorce?

On Behalf of | Jun 14, 2021 | Family Law |

Spouses typically share everything unless they had a prenuptial agreement before their wedding. Otherwise, the vast majority of their property will be marital assets that both spouses jointly own and that they have to divide when they get divorced.

Some property will clearly belong to one spouse, while other assets may be marital property that only one spouse has an interest in retaining. While your ex may not want your handbags or your sports memorabilia collection, they may feel strongly about your retirement savings. Will you have to split your account with your ex when you get divorced?

Some of your retirement savings are probably marital property

Some people think of property division as black or white. An asset either belongs to both spouses or only to one of them. However, quite a few assets fall into an awkward gray zone in the middle. Your retirement account is one such asset.

It is common for people to contribute to the same account before their marriage and after their wedding. The balance that you accrued before you got married is your separate property that you don’t have to split.

However, the amount you added to the account during your marriage and any contributions from your employer during that time are likely marital property that your spouse can claim. If you can’t negotiate your own terms for a settlement, then a judge will ultimately decide how to split your retirement account or factor it into the rest of their property division decisions.

Will you need a QDRO?

If your retirement savings are just kept in a standard bank account, you may not need to take any extra steps to divide those assets after the courts finalize your divorce. However, if your retirement savings are in a tax-deferred account like a 401(k), you could incur penalties for early withdrawals from the account if you don’t take care.

A Qualified Domestic Relations Order drafted in accordance with the property division ruling and approved by the courts may not just simplify the process of dividing your retirement benefits but also protect you from any taxes or penalties you would incur due to early withdrawals.

The better you understand how the courts handle complex assets like retirement accounts, the easier it will be for you to advocate for yourself in an upcoming divorce.