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Divorce and dividing retirement funds the right way

Georgia couples going through divorce should be sure to address the division of their retirement accounts in a careful manner. Certain types of retirement accounts, such as 401(k)s, are subject to different rules than other types of pensions. Taking the wrong step when dividing such assets can result in high penalties, a large tax bill and problems regarding fund allocation.

One of the most disputed issues during a divorce is the division of money, according to a 2016 survey of the members of the American Academy of Matrimonial Lawyers. While alimony was noted as the most contentious matter, pensions and retirement accounts were also high on the list.

In order to ensure a successful asset division process, the couples should consider the types of retirement accounts they're dealing with. For workplace retirement plans, it's necessary to obtain a qualified domestic relations order. This applies whether the assets in question are in a traditional pension plan or 401(k) plan.

Even though the qualified domestic relations order is based on the information in the divorce decree, it's considered a separate document. Therefore, it is important to contact the administrator of the retirement plan. This could help ensure a smooth transfer of the divorcing party's portion of the pension plan or 401(k) benefits.

A divorce attorney may work to ensure that a client receives their desired property division terms in a high-asset divorce. If necessary, legal counsel could verify that the proper procedure is being followed regarding the division of certain types of retirement funds.

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