How Retirement Accounts Are Divided in a Georgia Divorce

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Divorce is often a complex process that involves legal obligations, emotions, logistical concerns and other stressful considerations. Although many divorcing parties are distraught over the prospect of divorce, divorcing parties are often in the position of having to make important decisions that may have an impact on their life for years to come.

A property settlement agreement is an important component of many divorce proceedings. One of the most valuable assets a person may have is their retirement account.

Marital Property and Separate Property

Georgia considers two general forms of ownership types for married individuals: marital property and separate property. This property may consist of real property like homes and land, personal property like cars and jewelry and intangible property like bank accounts and retirement accounts. In Georgia, the marital property consists of property that is purchased or acquired during the marriage with a few exceptions. Separate property includes property that was owned before the marriage, property that is listed in a prenuptial agreement as separate and property acquired through gift or inheritance. Additionally, if separate funds were used to purchase property, this property is also considered separate.

However, there are ways that property can change from marital property to separate property. For example, a spouse may change the title to a vehicle or other asset from one’s own separate property to both parties’ names. A spouse can change a deed to real property to both parties’ names. Additionally, if both spouses add funds to a shared account and it is not possible to clearly and directly trace back these funds to separate property, it can become marital property.

Equitable Distribution

States use either equitable distribution or community property principles to divide property at divorce. Georgia is an equitable distribution state. The court determines how to fairly, but not necessarily equally, split the property. Separate property is not divisible during a divorce in Georgia. The court considers many factors when determining how to fairly divide property.

Methods to Divide Retirement Accounts

Retirement funds can be divided in a number of different ways. Account owners often want to minimize the amount of taxes, fees and penalties that they have to pay due to division. One way to divide retirement accounts is to request a direct transfer of half or other appropriate share of the non-account owner. This strategy is useful because it helps the parties avoid any penalty. Another option is to elect for an immediate payout, which may result in a ten-percent early withdrawal penalty and taxes. Another option is to choose to defer payments until the spouse reaches retirement age, at which point he or she may receive the payment as a lump sum or in a monthly payment.

QDRO and 401(k)s in Georgia

When retirement funds have to be divided because of divorce, a Qualified Domestic Relations Order is usually necessary. The Internal Revenue Service advises that this special type of order be used before distributions should be made by the administrator of the 401(k) account. This court order identifies the benefits that the non-account owner spouse is entitled to receive and directs the account administrator how to transfer the benefits.

Determining How to Divide Retirement Accounts

The court can consider many different factors when determining how to divide retirement accounts and other marital assets. It considers the duration of the marriage. It also considers the tax implications of different asset transfers and division. It considers the separate property that each party will maintain after the divorce. It considers whether spousal support is awarded and in what amount and payment structure. The court can also consider whether there are children of the marriage and which parent will have primary custody.

Contact an Experienced Georgia Family Law Attorney for Assistance

Obtaining retirement benefits from your divorce an in important component of your divorce. It is important for you to understand whether your spouse is entitled to a portion of your retirement account. It is also critical for you to know if you are entitled to a portion of retirement benefits in your spouse’s name as this can help you ensure that you can properly provide for your future financial security. It is possible to work out an agreement with your spouse during the divorce process so that you do not have to litigate the issue. You may each agree to keep your own retirement benefits rather than split them, but it is important to compare the values of each account and factor in the future value of these funds.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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