When you file for divorce, you likely accept that you will lose some of your personal property. Under the equitable distribution rules applied in Utah divorces, you and your spouse both have an interest in marital income and any other assets acquired during your marriage.
The longer you remained married and the closer you are to retirement age, the more concerned you may feel about your retirement resources. You may worry that you won’t have very long to rebuild your savings depending on what happens with your retirement accounts in your divorce.
How much of your account is at risk?
Your spouse may have a claim to an equitable share
The equitable property division rule in Utah grants both spouses an interest in the financial success of the other. Whatever either of you earned during the marriage will be subject to division in your divorce. Deposits to your retirement account are potentially at risk of division. In fact, interest accrued on older deposits and employer-matching contributions made during the marriage are subject to division just like those contributions made with marital income.
Equitable distribution rules mean that there is a lot of nuance in property division litigation, and therefore outcomes are hard to predict. The judge might split a retirement account equally in half or could let one spouse keep the entire account while granting the other different property worth a comparable amount.
You shouldn’t lose money to fees and taxes
Provided that a judge orders you to divide your retirement accounts or approves a property division settlement that includes account division, you won’t have to worry about your account balance dwindling even lower due to fees and taxes.
So long as one of your lawyers drafts a qualified domestic relations order (QDRO) and submits it to the plans administrator managing the retirement account, it is possible to divide the savings into two separate accounts without incurring penalties like you would for an early withdrawal. The timely creation of a QDRO and its submission to the appropriate parties are both crucial steps, as the division of the account is not automatic.
Learning more about what you can expect to happen to your retirement savings in Utah property division proceedings will help you prepare for your upcoming divorce.