Going through a divorce? Have retirement accounts to split? Before agreeing to or submitting a property division settlement for final approval, Pennsylvania residents need to make sure that they have filled out and filed qualified domestic relations order forms. If they do not, they will only hurt themselves financially in the long run.
When retirement accounts are split or emptied early, there are usually fees and taxes that must be paid unless the reason for doing so is considered a qualifying event. Divorce is a qualifying event but, in order for either party to avoid paying fees or taxes — which can be quite substantial — QDRO forms need to be filed and processed. Filling out a document seems simple enough, but one must take care in ensuring the form is submitted free of errors or it may be rejected and need to be filed again. As there are processing fees for pushing through a QDRO, getting it right the first time is a must.
In order to avoid costly mistakes when dividing retirement accounts in divorce, an experienced attorney can make sure that the client has done everything necessary to access the funds early. This includes helping the client prepare and submit a QDRO form. One’s legal counsel can also review other available options for property division is splitting retirements accounts is something one would like to avoid.
For divorcing couples in Pennsylvania, the property division aspect of the process can be overwhelming. This is understandable as there are a lot of little details that if missed can have significant consequences down the line. By having an attorney at one’s side throughout the dissolution process, it is possible to ensure that nothing is overlooked and that the final settlement is satisfactory for both parties.
Source: Forbes, “IRA Withdrawal Penalty A Cost Of Do-It-Yourself Divorce“, Peter J Reilly, June 30, 2017