When you decide to move forward with ending your marriage, you know this decision will impact your life in different ways. While you can be certain that you will experience changes short-term, you will also see different changes to your future as well. Your divorce will almost certainly affect your retirement and any long-term savings you accumulated over the course of the marriage. You will want to know what steps you can take that will allow you to protect your interests.
The division of retirement assets is often one of the most contentious and complex issues you could face in your divorce. It is in your interests to understand how you can fight for your property rights and see the best possible outcome to your final divorce order. As you consider what steps to take to best secure your future, you may benefit from a full understanding of how property division works in a Michigan divorce.
Division of retirement assets and other accounts
All marital assets are subject to division during a divorce, which includes anything bought, collected, earned or saved over the course of the marriage. The way the court will divide your retirement assets in your divorce will depend on the terms of your divorce order and the type of account it is. For example, with an IRA account, how you divide the funds will depend on whether there are taxes associated with the funds. The form of transfer depends on the wording of your divorce decree.
If the retirement assets are within a qualified plan, a qualified domestic relations order will be necessary. This is a document that states how the court is to divide the assets held in the fund between current or ex-spouses. As long as they are reported correctly and done correctly, QDRO transactions are tax-free. The receiving spouse can choose to roll QDRO assets into his or her separate qualified account.
The impact of your choices
The choices that you make during your divorce will affect you for years to come. It is in your interests to make choices that will allow you to look to the future with confidence. You will benefit from carefully considering the potential impact of these decisions by seeking insight into potential tax penalties and other effects. With guidance, you can make smart decisions that will allow you to preserve retirement plans.