Regardless if one lives in Pennsylvania or elsewhere, fees may accompany the division of certain assets when going through the divorce process. While there are plenty of things that can go through property division without any added fees of penalties, retirement accounts are not among them. The company handling the transfer of funds from one 401(k) or other retirement account to another has the right to charge a processing fee.
In order to split a retirement account, a qualified domestic relations order (QDRO) will have to be filed. The average cost for processing this type of request largely depends on the company who is handling the transfer. Currently, fees seem to be between $500 and $1,000. However, they can be higher, and increases are expected over the next few years.
Getting a divorce is already not easy on one’s fiscal state. Being hit with a significant fee from a retirement account split certainly does not help things. Unfortunately, if one’s divorce includes the division of retirements accounts, QDRO fees may be unavoidable.
A QDRO form may seem pretty straightforward, but even the tiniest of mistakes can result in it being refused and extra fees being charged for processing. Nobody, whether in Pennsylvania or elsewhere, wants that. During the property division process, one’s family law attorney can assist with filing a QDRO form in order to ensure that it is fully completed and free from error. This may not seem like a big thing, but it can go a long way in achieving a smooth transfer of funds and help in avoiding any unnecessary fees.
Source: Bloomberg, “The Divorce Penalty: This 401(k) Fee Can Add Insult to Injury“, Suzanne Woolley, Jan. 23, 2017