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What happens to your retirement accounts during divorce?

Divorce can be one of the most stressful events in a person's life. As you and your spouse split, you must determine child custody schedules, child and spousal support payments, where you will live and how your assets and debts will be divided.

Many Georgia couples wonder what will happen to their retirement accounts. For years, you may have been saving for retirement together. Now that your marriage is ending, will you or your spouse be able to keep the retirement funds? Will they all go to the working spouse? How can you ensure a secure financial future?

Understanding Georgia's property division laws

Georgia follows equitable distribution laws. This means that a judge will decide how to fairly divide your marital assets and debts, but they will not necessarily divide them equally.

In contrast to divisible marital property is an individual's separate property. Property deemed separate is not divided, and goes in full to one spouse or the other. Separate property can include items such as inheritances, gifts, personal injury settlements and property acquired before your marriage.

How are retirement accounts classified?

Retirement accounts, such as a 401(k) or pension, are considered marital property and are therefore subject to division during divorce. This may be achieved by setting up a qualified domestic relations order (QDRO). A QDRO informs the employer where to send the non-employee spouse's portion of the retirement account.

However, assets earned after divorce are considered separate and not marital property. The non-earning spouse only has a right to the retirement funds that are earned during the period of marriage. Later funds are the property of the individual earner.

Evaluating your financial future

Divorce will have a significant impact on your financial state. It may be a good idea to sit down with a financial advisor to discuss the impact of the divorce and develop a plan for future financial security. While you may need to alter your current financial plan, you can still have a bright financial future after you and your spouse split. Think of divorce as a fresh start that will allow you to build a new life.

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At Hecht Family Law we understand that this is not only a very trying time for you, but that you want to get what you feel you deserve during the divorce process. We will always keep your end goal in mind.

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