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Who gets the retirement accounts in a divorce?

When you divorce in California, the pensions that you and your spouse own can be more valuable than all the other assets you acquired during your marriage. As Reuters reports, dividing up these retirement accounts is tricky at best. If you fail to do it properly, you and/or your spouse could face thousands of dollars in taxes and penalties.

Before deciding to split up your retirement accounts and deal with the complications and expenses associated therewith, each of you should decide if you really want to do this. If you are a high-asset couple, perhaps you have other options for equally dividing your marital assets.


The problem with pension plans is that the vast majority of them have their own unique rules. If you do not precisely follow these rules, and/or if your property settlement agreement fails to contain the exact legal language required, one or both of you could be left out in the cold. For example, some pension plans stop paying you if you remarry, no matter what your property settlement and/or divorce decree say. Others contain a provision whereby you get nothing if the plan belongs to your spouse and (s)he dies after your divorce, but before a qualified domestic relations order is in place.

Check with each plan’s administrator to see if (s)he has a model agreement form that (s)he will give you so that your attorney can use it as a guide when drafting your QDRO. Once drafted, your attorney should send it back to the plan administrator for his or her approval. (S)he should be able to catch any mistakes or ambiguous language that your attorney needs to change.

QDROs are complex documents that you and your spouse must sign. Then your attorney must properly “attach” them to your property settlement agreement or otherwise incorporate them in it. In addition, the court must approve them.

This is educational information and not intended to provide legal advice.


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