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Dividing Retirement Accounts In A Georgia Divorce

by Sharon Jackson  on October 24, 2022 under 

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.

Equitable Divisions

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:

  • The length of the union.
    How long you were married to your spouse plays a significant role in dividing assets. A short marriage, such as one that lasted two or three years, typically means the couple did not acquire numerous marital assets, such as multiple properties. Such unions are subsequently easy for divorce courts in Georgia because the parties simply take what they brought into the marriage. Conversely, a long marriage that lasted 20 years or more often features many acquired assets that need dividing, including properties, businesses, recreational vehicles, frequent flier miles, fine art, and memorabilia collections. In divorces where the parties are amicable and interested in resolving the case without a trial, the lawyers might hire a mediator to assist with equitable division.
  • Conduct during the marriage. 
    Georgia Courts will always consider the parties conduct during the marriage to determine what is fair and equitable. This includes conduct regarding the finances and conduct as a spouse.  A few examples of conduct related to finances include refusal to work, spending addictions, and gambling.  Conduct as a spouse includes adultery, contributions to the household that enabled the other party to work and build career, and history of supporting the other spouse financially and in other ways.
  • Contributions to the marriage.
    The court considers how many assets each party contributed to the marriage throughout its duration. If you were a stay-at-home parent during the union and your ex-spouse worked, for example, it is unlikely you have a retirement account. The court may order your ex to divide their retirement account with you to help maintain your financial stability.

How is a 401(k) Divided During a Georgia Divorce?

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.

Do you have questions about dividing retirement accounts in a Georgia divorce?
Call Attorney Sharon Jackson to schedule a consultation.

When Both Spouses Have Retirement Accounts

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.

What is Considered Separate Property?

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:

  • Inheritances and other gifts received before or during the marriage, such as trust fund releases and assorted properties.
  • Property owned by one party before the union.
  • Personal injury damages, including money for lost wages.
  • Property deemed separate in a prenuptial agreement.
  • Property purchased by a spouse whose former spouse never used it. Such property is not considered “for the benefit of the marriage.”

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.

Get Help With Your Georgia Divorce

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.


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