This means you can work directly with your spouse to decide who will receive assets, such as a k. If you come to an agreement, you or your attorneys should write it down in a document called a "marital settlement agreement" or "divorce settlement" so there is no dispute later about who agreed to what.
Equitable Distribution Of Assets In Georgia
During the divorce negotiation process, there are often trade offs being made. For example, you may ask to keep your entire k in exchange for some other asset.
Tax implications for retirement assets are different depending on various factors, including the plan type. Sometimes, tax is deferred until the participant receives or withdraws the retirement funds. Thus, you should consult a CPA or tax attorney about the best way to deal with the specific retirement accounts in your divorce.
If you contribute to pension plans during marriage and prior to or after your marriage, you will have to calculate the amounts that were contributed at each time to figure out how much is part of the marital estate the dates that go into the exact calculation will depend, in part, on the laws of your state regarding dates of separation and pre-marital contributions. Some spouses opt for a lump-sum one-time payout on retirement benefits.
Talk to your attorney about whether this is a good idea in your case. Even if you and your spouse come to an agreement about the division of a k , you will need a court order to make the division happen. The special court order required to divide a k is called a Qualified Domestic Relations Order. This will require the help of an attorney that has experience preparing these types of order. If you and your spouse can't come to an agreement, and you use the legal system to handle your divorce, the distribution of assets will be decided by the court.
There are other methods for divorce such as mediation or other forms of collaborative proceedings.
The benefits of the QDRO
Choosing mediation or collaborative divorce allows you to take some of the control back. Georgia presumes that a stay-at-home mom contributed every bit as much to the marriage as the breadwinner. The Superior Court classifies property as marital or separate. Spouses must prove how much each piece of property is worth as well as how it was acquired - i. The court distributes property from one spouse to the other by evening out the shares of marital and separate property.
How Is a (k) Split in a Divorce? | LegalZoom Legal Info
In Georgia, as in many jurisdictions, the equity in the marital home is often one of the biggest assets the spouses divide. The equity is the market value of the house, less any debts or liens against it. Equity is established by determining what the current market value of the home is at the time of separation. Once the spouses agree to a current market value, any debts associated with the property mortgage, taxes, home equity loans, etc. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.
When children are involved, the Georgia courts are not averse to postponing the sale of the family home a major asset in any marriage until the youngest of the offspring reaches the age of This means that the spouses may be sitting on equity they cannot touch for a period of years. However, it also means that the children have a safe and secure home until they fly the nest. Marital property includes pensions.
Dividing Property and Debt During Divorce FAQ
Therefore, that portion of a pension that was earned by one party during the years of the marriage can be divided by the court in an equitable manner. In Georgia, vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension. Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties.
Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.
Dividing Annuity Assets in Divorce
In Georgia, the court may include the retirement benefits and plans earned by both spouses as marital assets available for division. Retirement benefits vary greatly but can generally be divided into two groups:. In Georgia, if spouses share in each others retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits.
The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc. Enter Your Zip Code:. Parental Alienation The Risks Involved. By using Investopedia, you accept our. Your Money. Personal Finance.
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Key Takeaways During a divorce, you will not be expected to pay taxes on the immediate division of retirement accounts as long as you file them correctly with the courts. Those are classified as transfer incidents. Clarifying the two is an important distinction. It is often the best course of action to hire a financial expert to assist in the division of assets. It can be easy to overlook, but make sure to update your beneficiaries during the divorce. Compare Investment Accounts.
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