Divorce in San Diego for Retirees
Nowadays, many baby boomers are getting divorced. Statistically, one in four over the age of 50 is getting divorced. The challenges facing this age group are quite different than the younger generation.
Some of these mitigating factors in this age group are retirement accounts, pension plans and Social Security benefits. With many couples, retirement is a huge portion of their overall net worth and will have to be addressed in an equitable fashion. It is not a simple matter to untangle due to tax and financial issues.
Retirement Accounts Related to Divorce in San Diego
An important point to remember is that retirement funds created during the marriage are viewed as marital property. Financial contributions to a 401(k) are accumulated through salary deductions and through years of salary earned. Both partners in a marriage depend on this money when they reach retirement age. Any retirement monies during the course of a marriage are viewed as joint marital property. However, if one partner has a retirement account prior to a marriage, those funds deposited before marriage remain separate property.
In a divorce situation, the Family court is obligated to adhere to federal guidelines when dividing 401(k) or 403 (b) plans. However when IRA’s become part of the process, the state law where the couple resides decides how the division process occurs.
Divorce in San Diego in Court
Division of a 401(k) plan, including numerous other pension plans, requires a Qualified Domestic Relations Order (QDRO). If your divorce settlement agreement decrees that you will be splitting a pension or a 401(k) plan, a court must sign a Qualified Domestic Relations Order, commonly abbreviated as QDRO. A QDRO will instruct the plan administrator on how to pay the non-employee spouse’s share of the plan benefits. A QDRO allows the funds in a retirement account to be separated and withdrawn without tax penalties and deposited in the other spouse’s account.