You and your spouse likely worked incredibly hard to accumulate assets over many years into a retirement account. The original thought was that one day a married couple would have enough money set aside in that they could quit their jobs and live out their remaining years together. However, for many Tampa residents, that idea gets snuffed out when a marriage doesn’t quite make it to retirement ago. What happens to the retirement account now?
Retirement accounts are almost always considered marital property. Marital property is property accumulated during the marriage that both spouses can lay claim to, even if their wages weren’t contributing directly to the account. The courts generally see 401(k)s and similar retirement accounts as property that is to be divided fairly between the spouses in cases of divorce. It is possible to separate funds from a 401(k) in a one-time divorce acquisition during the property division process.
Special care is to be taken with this process as doing it incorrectly could amount to paying unnecessary taxes and fees on the withdrawn money. That is because 401(k)’s are meant to be an account utilized when one hits retirement age. Taking funds out before a certain time can be costly. However, if one is going through a divorce and prepares the proper paperwork, making a one-time withdrawal can be arranged sans taxes and fees.
However, the divorce settlement will determine that exact amount before any action can be made. Retirement accounts are just like any other marital property asset in that they are generally to be divided fairly and equally between the spouses. Depending on the property division process, a divorcing spouse may petition to get the entire 401(k) in lieu of another asset, for example. The asset division process can be entirely tailored to the couple and what is best for them.