For many couples, property division is the biggest issue in their divorces. Arguments about shared or marital property are common, and sometimes spouses engage in misconduct to try to lash out at each other.
One spouse might try to hide property, or both spouses may want to keep the same assets, like the house, leading to an acrimonious battle in court. Dividing property can be hard to do even if you both avoid misconduct.
Some spouses can negotiate a settlement before going to court. Others require the support of a judge to divide their assets. Regardless of which approach you take, you may sometimes need specialized agreements or documents to divide specific property. When might your Virginia divorce require that you draft and execute a Qualified Domestic Relations Order (QDRO)?
A QDRO is for retirement accounts or pensions
Legal steps vary to fairly split up property. For example, a house will probably require refinancing and the execution of a deed. Court orders can be crucial for the transfer of certain assets.
For example, retirement benefits, especially those held in tax-deferred accounts, can carry penalties that diminish the value of retirement savings after withdrawals from the account. A QDRO helps you avoid those taxes and fees.
One attorney drafts the documents, and the judge who presided over your divorce can review and approve the document. It then needs to go to the plan administrator who manages the retirement benefits or pension. They will create a second account and split a portion of the balance of the original account into it. When done properly, this process will not result in any extra penalties or fees.
Do you have retirement benefits to split?
Determining if you need to divide your retirement account requires a review of your finances. If you don’t have a prenuptial agreement with your spouse, the chances are good that’s you will likely need a QDRO to split the marital balance of the account unless your settlement does not involve dividing the account directly.
Identifying the most valuable assets from your marriage and learning about how the courts divided them can help you during the complicated process of dividing your property in a Virginia divorce.