Gregg R. Lewis

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Gregg R. Lewis
Trusted Family Law Services In Columbus

How are retirement payments handled in a divorce?

On Behalf of | Aug 28, 2018 | High Asset Divorce |

Divorce is not something that only happens to young couples. It can also happen to you when you are in retirement or near retirement. This brings up some concerns as to what will happen with retirement income or payments when you divorce your spouse. According to Forbes, division of retirement can be complicated for many reasons.

First, some retirement may be considered marital property if you or your spouse contributed to it during your marriage, but some may be separate if you funded it completely before you were married. The account would have to be separate from any marital income to be separate property. In general, your retirement will be divided as any other assets, which means you could lose about half of any retirement accounts you have.

There are also taxes to consider. If you divide an account before you are retired, it requires special handling to avoid penalties and taxes. You would have to have a Qualified Domestic Relations Order. This ensures you can get the money now instead of waiting without having to pay penalties. You may still have tax liabilities, but generally, you will have to put this money into your own retirement account, so it is not immediate income. In most cases, you will not be able to touch that money until you reach retirement age.

If you or your spouse is getting retirement payments regularly, then it is considered income, which is handled like any other income and divided accordingly. This information is for education and is not legal advice.



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