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Divorce and the retirement account issue

On Behalf of | Dec 31, 2017 | Divorce

Sometimes, a retirement account is the biggest asset shared by a married couple. When that couple chooses to divorce, figuring out how to split such an asset fairly and without penalty can be a challenge. There are ways to do it, though. Georgia residents can turn to their divorce attorneys for help. ?

There are three ways to handle an IRA during divorce. The first is to leave it alone. The account owner can keep it, and the other party can be given more in other assets. The second is to split and have each party reinvest the fund in their own IRAs. The only thing needed to do this is the official divorce decree.

Finally, the third option is to use the funds to pay child or spousal support, or to provide the receiving party with a lump sum cash payment. In order to use an IRA for any of these purposes, a judge must sign off on a domestic relations order. If an early distribution is taken without a QDRO, both parties may feel the sting of the tax penalties and fees that accompany such an action.

It is entirely possible to access these accounts and avoid any serious consequences for doing so; it just has to be done in the right way. Georgia couples who are going through the divorce process can turn to their attorneys for help with the property division side of it, so that they can get the most out of it. With assistance, each party can walk away with settlement terms that serve their best interests.

Source: thestreet.com, “How Divorce Affects Social Security and Retirement Accounts“, Robert Powell, Dec. 15, 2017

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