Retirement accounts are often one of the biggest assets in a divorce, and many people going through divorce worry about losing their retirement savings, especially if they are nearing retirement age. If you are going through a divorce and are wondering if there are ways to keep your entire pension during a divorce, the answer is yes, but only if you “buy out” any marital interest your spouse has in the asset. How Does a Pension Work? The Details of Your Plan For the most part, property transfers incident to divorce are tax-free. Not all assets carry the same tax implications, so even when two assets appear to have the same value, the values could end up being very different after taxes are applied. For example, let’s say one spouse gets the marital home with $300,000 in equity as part of their property settlement, while the other spouse gets $300,000 in other assets. The spouse who got the home may be hit with capital gains tax if they decide to sell the home, making the settlement unequal. In the case of pensions, tax applies when the monthly benefit is paid during retirement. Therefore, it is wise to take the anticipated tax burden into account when figuring out an equitable property split. Dividing retirement plans can be complicated, and requires careful attention when your lawyer is preparing the final paperwork for your divorce. You may need a separate court order, usually called a Qualified Domestic Relations Order (QDROs), to cover the division of retirement benefits. Before making any decisions about retirement, get a copy of the Summary Plan Description from the retirement plan administrator. You should probably talk to a lawyer and find out about: Divorce LawyerWhen you need legal help with divorce, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
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