The goal for many people in Virginia is to plan for their future. For many, this includes contributing to accounts to help them plan for their retirement. For many couples, their retirement accounts are some of their most significant assets. Because their future financial plans often depend on these accounts, their fate during a divorce can have a significant impact on the rest of a person’s life.
Some couples choose to create a prenuptial agreement prior to their marriage. If one is in place, assets — including retirement accounts — will be divided as outlined in that document. Without an agreement, any income added into retirement accounts — either by the spouse or the spouse’s employer — during the marriage is subject to division during a divorce. However, the exact division is often unique to each case; a court can consider a variety of different aspects, including whether the owner of the account contributed to an IRA for the other spouse and whether one spouse earns more money than the other.
Most people need a Qualified Domestic Relations Order to move funds from one retirement account to another. While it is possible to accept a lump sum from the accounts, there could be penalties that apply, making leaving the funds in a retirement account preferable if they are not immediately needed. While divorcing couples can ask a judge to determine how these assets will be divided, the decisions made by the judge may be surprising. Coming to an agreement outside of the court can result in an agreement that is more tailored to each person’s wishes and needs, and could ultimately cost less money.
When people in Virginia have questions regarding divorce and how best to proceed, it may be tempting to skip seeking advice from an experienced professional and, instead, attempt to work through these decisions with help from the internet. However, mistakes made during the divorce process can have costly ramifications. In some cases, they may not be easily rectified. Having a knowledgeable professional can help ensure that those seeking to end their marriage fully understand the options and the implications of each.