Columbia Retirement Account Division Lawyer
A 401(k), IRA, pension, or other retirement account is more than numbers on an account spreadsheet. These numbers represent long-term security. So, a retirement account has an emotional value in addition to a financial value. Each spouse is theoretically entitled to a share of these accounts, as they are marital property. This financial and emotional division is usually different in different situations.
This emotional/financial value is very common in divorce property division actions, and at the Law Offices of Todd K. Mohink, our Columbia retirement account division lawyers are very adept at such divisions. We take both emotional and financial values into account, and then we work hard to find permanent solutions which are also cost-effective. Our goal is a just and right division which also upholds your legal and financial rights.
Retirement Accounts and QDROs in Columbia
50-50 divisions are not inevitable in an equitable distribution state like Maryland. Like all marital property, judges divide retirement accounts based on a number of factors, such as the length of the marriage. But in most cases, both spouses receive roughly equal shares of these retirement accounts. Nonemployee spouses have several options:
- Cash Out: Some spouses elect to take their share in cash. This option is especially common when the nonemployee only receives a small portion of the plan. Because of inflation, a dollar today is worth more than a dollar tomorrow. However, cash-outs may have some significant tax consequences.
- Do Nothing: If the nonowner spouse keeps the share in the existing account, that person (the Alternate Beneficiary) will receive a proportional share of the payouts once they begin. It is sometimes nice to do nothing and simply get money later. But alternative beneficiaries normally cannot make new contributions unless they separate the account.
- Account Split: Nearly all nonowner spouses roll over their share of the retirement account into a new tax-deferred account. Such a move provides long-term security as well as control over the money. Plus, there are usually no tax consequences.
Every retirement account division is different, because all accounts have different Qualified Domestic Relations Orders (QDROs). This document dictates the available options.
Possible Solutions in Columbia
If the owner spouse has been married before, the retirement account has probably already been divided once. A second 50-50 division could leave the owner with almost nothing. So, an alternative solution is usually best.
Offsets are very common in these cases. For example, a nonowner spouse might accept higher alimony payments in lieu of a retirement account division.
These kinds of arrangements are very common during settlement negotiations and mediation sessions. It is important for both sides to think these things all the way through. Sometimes, there are tax and other consequences to these divisions, so a seemingly good deal can turn out not so good. That’s where an experienced attorney comes in. You need someone who can advise you as to the legal, financial, and all other implications of certain decisions.
Connect With an Experienced Columbia Divorce Lawyer
Retirement account division is both an emotional and financial process. For a free consultation with an experienced family law attorney in Columbia, contact the Law Offices of Todd K. Mohink, P.A. We have several offices in the Howard County area.