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What to do about retirement funds amid divorce

When couples in Arizona decide to end a marriage, many questions regarding finances will arise. Individuals facing divorce may be wondering what to do regarding retirement accounts and assets that were shared with their former spouses. In order to save money, couples may attempt a do-it-yourself divorce. But without the proper legal agreements in place, couples may face penalties. When splitting retirement funds, there are steps that can be taken to help couples get through this process with minimal financial damage.

When separating, some couples may try to remove funds from shared retirement accounts. Removing money from retirement accounts and 401ks without the proper paperwork will result in severe tax penalties. If couples need to move or withdraw money from retirement accounts, a qualified domestic relations order may help them avoid taxes and stiff penalties.

Pensions can be tricky because they often have unique rules. Pensions in some states may not allow the divorced spouse to collect funds when they remarry. Nevertheless, it is imperative that couples get the proper legal agreements regarding pensions when divorcing, or they could be subject to penalties. Those with pensions should not get divorced until a qualified domestic relations order is signed. Doing this would ensure that those funds will be available without penalty.

The end of a marriage is definitely a confusing time, and many questions can arise regarding finances and retirement accounts. Individuals contemplating divorce in Arizona who have questions regarding legal agreements such as qualified domestic relations orders could benefit by consulting an attorney. An attorney experienced in family law can answer questions and help guide individuals through these difficult and uncertain times.

Source:, "Splitting retirement accounts is tricky for DIY divorce", Beth Pinsker Reuters, Nov. 26, 2017

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