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When you get divorced, your divorce attorney will help you negotiate the division of assets, including your retirement savings. Whether you were the primary income provider in your household or a stay-at-home spouse, this overview will you help understand your rights.

How Is a Retirement Plan Divided in a Divorce?

As part of a divorce settlement, you may have to divide your 401(k) and pension with a former spouse. Early withdrawals cannot ordinarily be made without being subject to fines and extra taxes. However, the courts have a system in place that allows people to comply with a settlement order without violating tax laws. Your attorney will have to file a qualified domestic relations order, or QDRO, with the court. This order instructs the plan participant’s employer to withdraw a portion from the account and remit it to your former spouse.

Your former spouse is free to designate how to invest the money. It should be deposited directly into an individual retirement account (IRA) or Roth IRA to avoid paying taxes on the distribution. If your ex-spouse is a member of the military or a government employee, a QDRO is not applicable. In that case, consult your lawyer about the proper process for the division of retirement accounts.

Can a Nonworking Spouse Apply for Social Security Benefits? 

divorce attorneyAccording to the Social Security Administration, a divorced spouse who was unemployed during a marriage may qualify for benefits based on their former spouse’s earnings. Some restrictions may limit eligibility. For instance, the marriage must have lasted 10 years or more, and a spouse can’t apply for benefits until 62 years of age. Also, benefits cease upon remarriage, and a couple must have been divorced for two years before an application for benefits can be submitted.

Once benefits are approved, applicants receive one-half of their former spouse’s entitlement. The unemployed spouse can still apply for benefits even if the employed spouse delays taking benefits until they’re 70.

 

To discuss the status of your retirement plans, contact the legal team at Riley Resar & Associates PLL in Lorain, OH. They strive to provide each client with prompt, professional, and skilled legal representation. To schedule a consultation with a divorce attorney, call (440) 244-5214, or visit their website to learn more about this practice.

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