The division of assets is probably one of the most difficult tasks to manage when you are going through a divorce.
When you think of assets, the marital home no doubt comes to mind, along with bank accounts, cars and things such as your baseball card collection. To add a bit more confusion to the mix, there are your retirement accounts. How should the court divvy those up?
Keep in mind that by Maryland law, asset distribution will not necessarily be on a 50/50 basis. This is an equitable distribution state, meaning that the court’s objective is to work out a decision that is fair and satisfactory to both parties. The judge will look at factors such as the length of your marriage plus each partner’s current financial situation and ability to earn income.
Retirement account differences
There will be different paperwork for different types of accounts. For example, the purpose of a Qualified Domestic Relations Order is to see that the funds from your 401(k) are distributed properly between you and your spouse. In terms of tax implications, you contribute pre-tax dollars to your 401(k), while you pay income tax before contributing to a Roth IRA. A family law attorney will help you understand the tax consequences that pertain to the different kinds of retirement accounts.
Abiding by the rules
In the state of Maryland, the judge encourages divorcing parties to get together with their attorneys outside of court to work toward a settlement agreement. You can rely on legal guidance to ensure that the division of assets such as your bank, investment and retirement accounts happens in accordance with local, state and federal laws. If you and your spouse are able to work together on any details in advance, such as those that involve the distribution of your retirement account funds, your meeting with the attorney will go that much more smoothly. Property division can be a complex matter, but with cooperation, legal help and a positive outlook, you and your soon-to-be ex will find the distribution of assets to be less troublesome than you imagined.