How Does Alabama Law Address The Division of Retirement Assets in a Divorce?

Helping You Pave A New Road in Alabama

Divorce is hard on everyone in the family; there is no way around that. Emotions and tempers frequently run high, and it is easy to lose sight of essential matters, which is often tricky. During such a heated time, having someone who can remain impartial and coolheaded is vital. This is where a dedicated divorce lawyer from Jim Golden Law can make a difference for you.

The team at Jim Golden Law is compassionate, skilled, and knowledgeable of Alabama family law. We understand the nuances of Alabama divorce laws and will ensure your rights and assets are protected. We’re on your side from day one! At Jim Golden Law, you can rest assured that our skilled and knowledgeable team has the refined legal skills, experience, and empathy to bring your case to a favorable conclusion. If you need help navigating the complex road of Alabama’s family law during your divorce proceedings, Call 866-950-6652 for a free consultation.

How Do I Protect My Retirement During My Divorce?

Retirement is a time people plan for and look forward to, but what happens when those plans change and you realize that you may not be spending your golden years with the person you thought you would? Life happens, and sometimes relationships change. If your marriage ends, that doesn’t mean that you have to lose everything. While your assets may be reduced, they can still be protected. These assets include:

• 401ks
• IRAs
• Roth IRA
• State Pension
• Private Pension
• Military Pension

In Alabama, most retirement assets —including pensions and 401ks—are split under qualified domestic relations orders (QDRO), but IRAs fall under something different. They are subject to a process called “Transfer incident to divorce.” The process for all is essentially the same; different tax rules and classifications depend upon the type of benefit being handled and various time frames for disbursement. It is best to consult with a qualified attorney to discuss any questions.

S0, What’s The Skinny?

Here are a few things to remember:

• Alabama is not a community property state. Judges have broad discretion in dividing marital assets. It is crucial to seek legal counsel before any negotiation.
• Separate vs. Marital assets- In many circumstances, only assets during the life of the marriage are up for discussion.
• When to pay your ex-spouse- You don’t necessarily have to withdraw the portion of the funds now or designate a sum upon your retirement. It is acceptable to substitute other assets equal to their share of the settlement.
• Tax Liabilities—Before reaching an agreement, consult with your divorce lawyer regarding any tax consequences your 401k or Roth IRA may have. 

What is a QDRO

A QDRO is a qualified domestic relations order. It is an additional document ordered by the court that allows for the division of specific otherwise non-divisible assets such as retirement benefits. It allows insurance companies and former employers to pay benefits directly to the ex-spouse. This may seem like a small matter, but when it will enable victims of domestic or sexual abuse to be free from further contact with their abuser, and that is a significant step in recovery for many trauma survivors. For that reason alone, QDROs are valuable documents.

Additionally, these documents protect you. For example, if your retirement benefit is divided in the divorce and if your former spouse dies, remarries, or spends the remainder of the benefit before the DRO is qualified, you may not receive the benefits you were granted. It is imperative that you seek the counsel of a divorce attorney to help you navigate the complex Alabama divorce laws.

Are There Pitfalls To Avoid?

A few things to remember can make protecting your retirement assets in a divorce easier. The first being:

• Consult with us! We are more than happy to answer any questions you have. We understand that divorce is a difficult and painful time for every family, and no matter the circumstance, we are here for you. We will protect your rights, get you results, and help reduce your stress. Let us bring back your peace of mind. 
• Ensure you understand all the rules related to the distribution of your 401k assets. If you are unsure–ask. 
• Make sure you understand the tax consequences related to the distribution of assets. Ultimately, it is best to be working with a professional financial advisor who can help you make informed choices regarding your retirement. 
• Lastly, remember to update your beneficiary designation. This is frequently overlooked in divorce proceedings, and many people are unaware of it. 

When Should I Call a Family Law Lawyer for Help with My Divorce?

Divorce is one of the most challenging and painful things you can deal with as an adult. Ending a relationship is messy and emotional. Tempers often run high, and it can become difficult to communicate. You need a trusted team’s calm, empathetic guidance to help you through this complex life transition.

You’ll find just that at the Jim Golden Law. Our team is dedicated to ensuring you stay informed of what is happening with your case at all stages. We protect your rights. We get the results you deserve. Call Jim Golden Law at 866-950-6652 for a free consultation.