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Commonly Forgotten Asset in an Arizona Divorce: Retirement Accounts
A divorce is not only emotionally stressful, but the uncomfortableness of cutting financial ties with a former spouse can be even more difficult. It is true that alimony, child support, and real property are the focus of many divorces; however, when gathering and distributing marital and nonmarital assets, an often forgotten asset that is just as important as those is a spouse’s retirement account.
Know What to Look For
Across the country, retirement assets that were obtained during the marriage are considered marital property. This means the spouses both are entitled to this asset. Some retirement accounts that should be sought include 401(k)s, traditional and Roth IRAs, as well as pension plans from current and prior jobs. If the marriage lasted more than 10 years, a former spouse may be able to claim the greater of his or her own Social Security retirement benefits or half of the former spouse’s.
Nonetheless, even if both spouses are entitled to retirement accounts, this does not mean they will be split 50/50 during a divorce. A knowledgeable Tempe divorce attorney will understand that retirement plans are governed by local law and divided using a Qualified Domestic Relations Order (QDRO), and can help ensure you properly prepare one during a divorce.
A QDRO specifically instructs the retirement plan administrators – the entity that is responsible for receiving and distributing funds for the plan – that funds should be distributed to a spouse who may not have participated in the program but has claimed an interest during the divorce proceedings. It is important to protect survivor benefits in a QDRO because this protects the beneficiary’s right to receive – or continue to receive – retirement distributions after the death of the spouse. It should not be assumed that because distributions are received during the former spouse’s lifetime these will continue upon his or her death. In fact, failure to affirmatively request survivor benefits will likely result in payments stopping once the former spouse dies.
If you or someone you know is facing divorce in Arizona, contact an experienced Tempe divorce attorney today learn about what you may be entitled to under Arizona as well as federal laws. With years of family law experience, the attorney at the Law Office of Ronald L. Kossack can guide you through every step of the divorce process with compassion and legal advocacy. Schedule an initial consultation by calling (480) 345-2652 or clicking here today.