Planning for retirement may be something that many Utah residents struggle with. The funds in these accounts are important, and it can be a challenge to plan for future needs. Unfortunately, for individuals going through divorce, retirement funds could end up divided, making planning for the future even more difficult.
Often, retirement savings represent one of the most valuable assets a person has. Likely, if individuals have been working for decades before getting divorced, they have amassed a considerable nest egg in their employer-sponsored retirement accounts. These funds could end up much lower if the court orders them split during asset division proceedings. This could be a good thing for a spouse who may not have as much saved for retirement and will obtain more funds, but for someone with a substantial amount, it could be devastating.
Of course, an ex-spouse cannot simply begin siphoning funds from the other party’s retirement account. A qualified domestic relations order is necessary to determine how the share of the funds will be paid. It also allows the withdrawal of the funds without the application of the usual penalties for early withdrawal.
Dividing retirement funds during divorce can be complicated. If Utah residents are worried about losing a significant portion of funds that they will need later in life, they may want to consider their options for negotiating. It may be possible for interested parties to offer other assets of similar value in efforts to maintain their retirement accounts in full. If all parties are willing to compromise, a satisfactory outcome could be achieved.