There are many aspects to a divorce in Tennessee. People need to go through the complicated process of splitting one life into two separate lives. This includes determining who will be caring for the children. Responsibilities and property that were shared will now become the responsibilities and property of just one spouse. As one can imagine this is not always easy and there can be many disputes between the couple during property division.
There are also many different types of property that the couple may own. They can own homes, cars, bank accounts, retirement accounts, investment accounts, collectables, household goods and other types of property. The couple will end up dividing their property during the divorce, but how that is accomplished depends on the type of property. Some are easier to divide than others.
One type of asset that can be a little more complicated to divide is certain retirement accounts. This is because some require a special order to actually divide account. The special order is called a Qualified Domestic Relations Order (QDRO). This order is required when dividing 401(k) accounts, pensions, and other qualified plans. It is not required when dividing an IRA though.
A QDRO is required for qualified plans because they are governed by ERISA, which has rules about when people can withdraw from them and the tax consequences for doing so. Therefore a QDRO is needed to ensure the requirements are met to remove funds without suffering the tax consequences for doing so.
Many people have retirement accounts when they divorce in Tennessee. These must be divided by the couple, but in order to do so the couple must obtain a QDRO. Retirement accounts are just one of the many assets that people divide in divorce and each one have their unique complications. Experienced attorneys understand the process though and may be able to guide one through it.
Source: Fidelity.com, “Divorcing? How to split up retirement nest eggs,” Duncan Ralph, February 2, 2017