As you think about divorce, you have to consider the financial consequences of ending your marriage. From possible child support obligations to the loss of home equity, there are numerous financial consequences possible when you decide to file for divorce. The consequences can affect your plans for the future and even your standard of living.
Couples in North Dakota either settle their own property division matters or litigate, which involves having a judge settle those matters for them. If you do go to court to divide your property, does that mean a judge will inevitably split your retirement savings in half?
Numerous factors influence the division of specific assets
The first consideration when trying to determine what will happen with your retirement accounts in a divorce is to establish whether or not you have any pre-existing marital agreements that apply to those assets.
Maybe when you first got married, you and your spouse each had your own retirement accounts, so you made them your separate in a prenuptial agreement. If you have a signed agreement discussing your retirement savings, you may not need to worry about dividing the account.
However, barring an agreement, the chances are good that some of your savings will be vulnerable. Whatever you contributed to the account during the marriage is marital property that you can divide in the divorce, even if the account is solely in your name.
Thankfully, you don’t always have to split every piece of your marital property. Sometimes, you just need to know its value so that you can make decisions with your largest assets that are fair to both of you. The equitable distribution standard in North Dakota property division cases gives a lot of discretion to the judge, who can split specific assets or even let one spouse keep much more of the marital estate because they become solely responsible for marital debts.
What if you divide the account?
If the judge decides to divide your retirement savings or if that is the solution you reach when negotiating with your spouse, you can still protect what you have saved. By having one of your lawyers draft a qualified domestic relations order (QDRO), you can theoretically divide the account without needing to pay taxes and penalties that would substantially diminish the total value of your retirement savings.
Although the chances are good that you may have to share at least some of your retirement savings with your spouse, careful planning can help you rebuild those savings before it is time for you to start enjoying your golden years. Understanding some of the challenges that arise and high-asset North Dakota divorces can help you prepare for your day in family court.