Virginia couples who are going through a divorce and who need to divide certain types of retirement accounts will need a document known as a Qualified Domestic Relations Order. This permits the division of the account and may also be used to pay alimony or child support. The retirement account is divided equitably, but this does not mean that it is necessarily a 50/50 division.
The QDRO is a complex document, and an attorney might recommend a certified divorce financial analyst to assist in understanding the financial side of things. The CDFA may be able to explain how taxes and other fees might have an impact on the worth of the retirement account and how property division should proceed.
In one potential divorce scenario, people with an understanding of the fees that may be associated with a QDRO and dividing an account might set aside $100,000 of their share worth $1.1 million to pay fees and taxes. They could put the remaining amount in a tax-free rollover. In a different case, a couple might decide that one of them will get the home, which is paid off and worth $200,000, while the other gets the 401(k) worth $225,000. However, taxes and fees might lower the worth of the 401(k).
There may be a number of complex financial issues to untangle in a divorce. In addition to dividing the retirement account, individuals might need to divide a home and other assets. If either or both own a business, the process may become particularly complex. Couples who are able to negotiate property division with the help of their respective attorneys instead of going through the adversarial process of litigation might be happier with the outcome.