Traditionally, Utah law dictates that all marital assets are divided equitably upon divorce. Practically speaking, this means that if either party to a divorce has a retirement account, part of that account may be awarded to the other party. As you can imagine, this opens up a whole slew of questions.
First, many are curious as to how to divide an account without penalty. This is generally done through a document called a qualified domestic relations order, or QDRO. This is a court-signed order given to the plan administrator, who then creates a mirror account under the exact same terms and policies as the original account, but this time, with the payee spouse’s name. The appropriate amount of funds is then removed from the original account and placed into the new mirrored account for the payee.
Second, a mirrored account frequently creates a situation in which an individual now has a pension at their ex-spouse’s company, and that company’s pension and/or plan is often not a good fit for you and your retirement plans. However, you are not out of options! Individuals may be able to roll over their pension into another account that better suits their needs.
At Pearson Butler, we have attorneys who specialize in handling pension matters and drafting these orders. We can walk you through the process and ensure that the appropriate funds are placed in the correct accounts.
We have the resources and the answers to get your retirement planning back on track and give you peace of mind for your future! At Pearson Butler, when it takes a team, we understand. Give us a call at (800) 265-2314 today.