There are a number of questions that must be answered when dividing a retirement account in a divorce.  Divorcing couples are often focused specifically on the amount or percentage of the account funds that they are dividing.  It is also important, though, to identify the date of that division, and whether investment changes are included or not.  This information is necessary because dividing a retirement account is not as immediate as dividing a liquid asset. Dividing a retirement account in divorce requires a special court order (usually called a Qualified Domestic Relations Order or QDRO) .  The process of obtaining and implementing one of these orders is not immediate, and requires approval by both the court and the plan's administrator.  During this time, the account will change value.  Accounts change in value due to market fluctuations, but also due to withdrawals, loans, and ongoing contributions.  All of these changes can create havoc wit...

In a divorce, the court has the ability to order the division of retirement accounts, as a one-time non-taxable event, transferring a portion of the account from one spouse to the other. Whether or not all or part of a retirement account is divided depends on the rules of that jurisdiction and the facts of each case.  In this article we're not dealing with that determination but assuming there has been an agreement or order to divide an account.  Now what? How the account is divided, and whether a QDRO or some other specialized order is required, depends on the type of account.  Regardless of the type of account, however, there are five basic pieces of information that a Plan Administrator or QDRO drafter will need in order to properly divide the account.  When drafting a Divorce Agreement or proposed Judgment it is best practice to include these five elements: Identify the Plan Information Clearly  - It may seem obvious, but the Agreement or Judgment m...