Concerns about financial security weigh heavily during a divorce, particularly if the couple is closing in on retirement age. So, it is essential that spouses divide up all marital assets fairly and equitably. This can include retirement accounts like 401(k) plans, IRAs, pensions and other investments related to retirement. These accounts can be significant assets as the couples approach retirement age.
It is common for retirement accounts to be part of an employee benefits package. The other spouse may not realize its value or that it even exists. As with other marital assets, spouses should recieve a portion of those accounts.
QDRO address this issue
A Qualified Domestic Relations Order (QDRO) is a special court order designed to divide retirement accounts to ensure each spouse gets their fair share. It creates or recognizes that there is an alternate payee’s right to receive benefits from a retirement plan. There is no requirement that spouses approve or endorse a QDRO as part of the assets, so it is critical that a spouse who is not the listed beneficiary to raise the issue. They can better understand the issue by:
- Learn about the importance of retirement accounts and their long-term security
- Be more aware of household finances and the value of assets
- Learn what a QDRO is and how it can help
- Be proactive in discussing the division of assets
Effective ways for addressing this marital asset
A recent survey by AARP found that women, in general, were less aware of retirement plans and were concerned about how to address them. The research suggested the following tips:
- Engage in fact-based discussions.
- Use easy-to-understand language.
- Have a call to action on how to address the issue.
- Use specifics like a 401(k) or company pension when discussing the matter.
- Make it clear that they are legally entitled to a fair and equitable division of all marital assets.
- Explain why a QDRO is helpful.
- Make it clear that the divorce is not final until this matter is resolved.
Help can also be useful
These can be significant assets, and it is worth the peace of mind to work with a family attorney to address this matter, especially when there are disagreements over how to divide assets. It can lead to long-term financial stability as spouses move forward to the next stage in their life.