Dividing marital assets is one of the main processes if you are getting divorced. Retirement accounts are among these assets, and the state determines how they are divided. As a Georgia resident divorcing their spouse, take a moment to learn about dividing retirement accounts in a Georgia divorce.
In Georgia, marital assets are divided using equitable division. This does not mean the assets are “split down the middle” or otherwise divided equally. It means the assets are divided regarding certain factors in a way that is as fair as possible. Typical factors relating to these divisions include:
Several retirement funds, including traditional 401(k)s provided through employment. Since retirement accounts are usually viewed as marital assets in Georgia courts, 401(k)s are subject to equitable asset divisions. Once prepared, the signed order is submitted to the 401(k) plan administrator. If the administrator rejects the order, it must be corrected to comply with the specific requirements of the employer. Upon accepting the order, the administrator pays the receiving spouse the specified amount which may be a flat dollar amount or a percentage. The receiving spouse can have the funds deposited into a checking or savings account or an existing or newly created retirement account. To receive the full tax protection benefits, the funds must be deposited into a “qualified account” such as another 401k account, IRA, or similar retirement account. If the funds are merely deposited directly deposited into a post-tax checking or savings account, then penalties and taxes will be applied.
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If you and your former spouse have 401(k)s, IRAs or any other retirement accounts with similar amounts, then dividing them is may be unnecessary. However, suppose your account is significantly higher than your spouse’s, and there are no other assets that make up the difference, such as vacation properties and antique car collections. In that case, you will probably have to transfer a portion of your retirement fund to your ex. Conversely, if your account is higher and multiple other assets make up the discrepancy, you will likely be allowed to retain your entire fund.
Any assets that are 100% acquired before the marriage is typically considered separate property. Common examples of separate property that is not subject to division include:
Separate property designations differ by state. Since Georgia is not a community property state, the above examples apply. Community property states require ex-spouses to divide their marital assets equally because they are “jointly owned.” That means that compensation for lost wages and property purchased by one spouse that the other did not use are considered community property in applicable states.
What happens if you acquired some of the 401k before you were married and some after the marriage?
If you started working at a company before you were married but continued to work there after the marriage, you are still entitled to keep the pre-marital portion as separate property. You may also be able to keep the interest and value increase accumulated on the pre-marital portion. The vested funds that you contributed or earned after the marriage is divided between you and your spouse. Experienced family law attorneys like Attorney Sharon Jackson, LLC use multiple legally accepted formulas and methods for calculating the marital portion and the non-marital portion in order to divide the retirement asset. If there is a small amount of money, the parties may agree to an estimated amount. If there is a large amount at issue, then the lawyer may recommend using a financial specialist to determine an exact calculation of the marital and the non-marital portion.
If you are divorcing your spouse, contact experienced Georgia Divorce and Family Law Attorney Sharon Jackson LLC. Sharon Jackson provides counsel and representation in all areas of family law, including divorce, child custody, and alimony. Call our office at (678) 436-3636 today or visit the website for more information.
Attorney Sharon Jackson LLC
175 Langley Drive, Suite A1
Lawrenceville, GA 30046
Phone: (678) 909-4100