Retirement in a North Carolina Divorce: How Does it Work?
While many different pieces of property can be difficult to divide in a divorce, retirement assets can often be especially problematic. Many spouses do not even consider that these assets could pose an issue during their separation. You may be more concerned about things like child custody, child support, and keeping the family house. Although these are all important factors to consider, your retirement asset can have a considerable impact on your future. Because of this, it is important to take this matter seriously and make sure that your retirement assets are being protected.
One of the best ways to do this is to enlist the help of a qualified, experienced divorce attorney in the Charlotte area. Team up with one of our legal professionals and dealing with your retirement assets during a divorce becomes much less of a headache. There are many ways to protect these assets as you approach your separation, and we can explain all of your options in a clear, concise manner. An attorney who has experience in things like high conflict divorces and complex asset division can help you reach the best possible legal outcome.What Type of Retirement Asset Do You Have?
The first question you need to ask yourself is what kind of retirement asset you actually have. Each retirement asset may follow different rules when it comes to a divorce, and it is important to understand these rules and regulations before you move forward. If you make the wrong move, you could forfeit some or all of your assets.
A Thrift Savings Plan is a common retirement asset among federal employees and military service members. TSPs require any division of assets to be clearly put in writing in a divorce decree. If you have a verbal agreement or any other kind of written agreement, the division of the assets will not be recognized. This means that if a spouse takes the wrong step, they could lose access to this retirement asset during a divorce.
A 401k also requires a unique approach. In order to divide this retirement asset, you will need to obtain a Qualified Domestic Relations Order. Otherwise known simply as a QDRO, this gives an ex-spouse the right to receive a part of your plan account. However, drafting the QDRO is a deceptively complex process, and you can make mistakes if you do not fully understand the exact guidelines of your pension plan.
An IRA is another popular type of retirement asset, but there are important tax implications to consider if you are dividing this asset during a divorce. If you are not careful, you can be hit with a massive tax bill, making the divorce needlessly expensive and complicated. You need to make sure that the division of your IRA is treated as a transfer incident if you want to avoid this scenario.
As you can see, there are many different types of retirement assets, and each one requires a unique approach. Teaming up with a skilled attorney is crucial. You need an attorney who is willing to look into the exact guidelines of your retirement asset and choose the most efficient approach as a result.Trading Assets
Perhaps the most obvious way to protect your retirement assets is to simply negotiate with your spouse and “trade” other assets. For example, you might say that you wish to keep complete control of your Thrift Savings Plan. You might then offer your former spouse complete ownership of the family home, and in exchange, they would allow you to keep your retirement asset without any division necessary. This can all be ironed out in a separation agreement prior to the actual divorce trial, and it is by far the most efficient way to handle this situation. In these circumstances, the parties have far more control over what happens with their assets than they might if they go to trial.Enlist the Help of a Qualified Lawyer Today
If you have been searching Mecklenburg County for a qualified, experienced divorce attorney who can help you with this matter, look no further than Arnold & Smith, PLLC. We have dealt with plenty of divorces in Charlotte and surrounding cities over the years, and we are extremely well-versed in the various issues that can arise when dividing retirement assets. Remember, this is your future we are talking about here. It makes sense to protect your retirement assets whenever possible, and we can help you do this in an efficient, confident manner. Book your consultation today, and we can develop an effective action plan together.