In Massachusetts, all items and possessions acquired by a couple during their marriage fall under the category of “marital property” — unless there is a prenuptial agreement that defines it as otherwise. Everything that you own, whether it’s individually, jointly, a gift, within a trust, with a 3rd party, or any other way, it’s all considered marital property. The only property that is not considered marital is property attained by any party before the marriage.
This includes every asset as well as liability/debt. Massachusetts is an equitable distribution state, which means the court will try to achieve a fair allocation of property based on a list of guidelines or factors. Equitable or fair doesn’t necessarily mean a 50-50 split, although that may happen in some cases. Unless you and your spouse have an agreement about how to divide property, a judge will consider several factors in deciding who gets what and how much.
This goes for retirement accounts as well. If you are worried about how the MA courts might handle your retirement accounts during your divorce, you need to talk to a seasoned family attorney like Jay Davis as soon as possible. With nearly three decades of experience in Massachusetts family law behind him, Jay and his team are in a position to handle even the most complex cases. You can call Davis Law Group at (617) 752-6216 or send a message online to schedule a complimentary consultation with us.
What Does it Take to Divide a Retirement Account in an MA Divorce?
When it comes to dividing a retirement account during a divorce, the first step is to determine its value. This usually takes individual methods of accounting, but sometimes, it can require a thorough analysis by an actuary.
One of the most important documents you’ll need is a Qualified Domestic Relations Order (QDRO), which is critical for dividing retirement accounts such as 401(k) and pension to prevent any withdrawal and tax penalties. A QDRO is essentially a legal document specifically designed for retirement plans in order to pay alimony, child support, or marital property rights to the former spouse.
Your divorce attorney can help you draft a Separation Agreement that lists all the detailed requirements that must be included within your final QDRO so it meets the prerequisites of your retirement plan and doesn’t lead to any complications in the future.
Not all retirement accounts need a QDRO, however. For example, your Individual Retirement Account (IRA) doesn’t need a QDRO. You can simply refer to it as a transfer incident to divorce to avoid any withdrawal and tax penalties. A transfer incident to divorce is when you (the account owner) transfers a portion or entirety of the IRA to your ex-spouse specifically due to the divorce.
Depending on the amount and diversity of the retirement assets owned by you and your spouse, more than one QDRO may be needed. It goes without saying that drafting the QDRO and making sure it is done right so your future is protected can be a complicated process.
Since retirement plans often vary greatly in terms and requirements, MA divorce attorney Jay Davis works closely with a certified QDRO expert to ensure that your future retirement is taken care of. If you have any questions about your retirement account distribution, feel free to get in touch with us online or call Davis Law Group at 617-221-354.
How MA Courts Handle the Distribution of Retirement Accounts
As mentioned above, retirement accounts are considered marital property in a Massachusetts divorce. Correlating with this, depending on the duration of your marriage, all the funds you deposited into your retirement accounts before your marriage will go solely to you. But anything that contributed to the accounts after the marriage might be split between you and your ex-spouse.
One crucial detail to note here is, the longer the length of your marriage, the more likely the court is to order a split of the whole amount.
For example, if you had $200,000 in your 401(k) account before you got married, but that amount grew to $400,000 by the time you got divorced, it’s possible that only the second $200,000 would be divisible (so your ex would get $100,000). But, if you were married for several years, for example, 10 or more, the judge is more likely to divide the whole amount (so your ex would get $200,000).
Even when the court orders a portion of your 401(k) to be awarded to your ex, the retirement account itself will need to be sent a QDRO for approval. Otherwise, your ex-spouse will not receive the funds.
Consult with a Top-Rated Attorney at Davis Law Group About Dividing Retirement Accounts During Your Divorce
Newlyweds may not have much to worry about regarding the distribution of their retirement or pension accounts in a divorce. However, if you have been married for decades, you may have amassed significant wealth in your pension accounts. Whether you are considering divorce or you’ve been served with divorce papers, you need a good lawyer in your corner. This is where we come in.
If you are looking for clarity as to exactly how the court will handle your’s (and/or your spouse’s) retirement accounts during your divorce, don’t hesitate to reach out to us at Davis Law Group. Our committed and resourceful team of family attorneys can explain how the distribution process may work in your specific case and explain which assets you may be entitled to keep. We offer a free, no-obligation case consultation. Speak to us at 617-221-354 or leave a message here.The post What Happens to Retirement Accounts in a Massachusetts Divorce? first appeared on Davis Law Group.