You know that retirement account you started building during your marriage? It also is subject to division during the divorce. Divorcing couples must be careful, however, to ensure a retirement plan or account is properly divided to protect against unnecessary tax or withdrawal penalties.
One way to ensure the account isn’t further reduced by penalties is to transfer money using a Qualified Domestic Relations Order (“QDRO”). These orders avoid any early withdrawal penalties as the divide is incident to divorce.
Second, each plan as its own set of rules for withdrawal or changing plan designations. Last, you may be able to divide other liquid assets in a more creative way to avoid any withdrawal from your retirement plan.
An experienced DuPage, Kane, Kendall, or Will County family law attorney can help maneuver each plan’s rules and structure a settlement that protects your egg.