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401K and Retirement Accounts in a California Divorce?

401K and Retirement Accounts in a California Divorce? In most California divorces, pensions along with other retirement accounts are among the highest-value assets that should be protected during a divorce. Retirement and pension accounts are in many forms treated like other assets and they are subject to equitable distribution. Consequently, when preparing for a divorce in California and significant retirement assets are owned, it is important to carefully plan in order to protect personal interests. A skilled divorce attorney can provide knowledgeable assistance through the rigorous process. With many years of dedicated experience, the attorneys at RM Law Group, LLP can help.

For many years, the family law attorneys at RM Law Group, LLP have dedicated their careers to helping their clients achieve the best possible outcome for their case. The attorneys at RM Law Group, LLP understand that when it comes to divorce in California, the matter can quickly become contentious. As a result, the law firm is 100% committed to advocating for their clients’ best interests. To request a no-obligation consultation with RM Law Firm, LLP, consider completing the online contact form here.

Distributing Retirement Plans

Retirement Distribution

When going through a divorce, it could be tempting to take the distribution from one’s retirement account to pay for expenses stemming from the divorce. It is important to note however, that when under the age of 59 ½, there could be taxes and/or tax penalties when taking the distribution. These taxes and penalties could add up to thousands of dollars, contingent on the type of distribution. Fortunately, splitting up a retirement account can be done without having to bear these expensive consequences.

Transferring Funds to Other Retirement Accounts

It may be possible to transfer funds from one account to a different one, however, this process must be done properly to prevent unnecessary fees and taxes, which could result if the transfer appears to resemble an asset distribution.

Further, this transfer will only be available for Roth and traditional IRAs. There must also be a decree of divorce, which outlines the process to successfully avoid the fees. Even when spouses agree to the terms, this sort of transfer should be avoided until the divorce has been finalized. It should also be noted that even when there is a decree, this method of transfer is not always best.

Leaving Retirement Accounts Alone

In some cases, the easiest or safest solution could be to simply leave the account alone. When the assets are worth $1 million and the family home is worth about the same, each party could take their share of the assets without having to split the retirement account. By forcing the transfer of the retirement assets could result in complications in the divorce proceedings.

Schedule a Free Consultation with a Skilled Family Law Attorney

The division of a person’s retirement accounts demands attention so that thousands of dollars are not lost. With that said, each divorce case is unique, therefore, every case must be carefully examined. If you are going through a divorce, obtain the support of a skilled attorney who has experience in divorce cases and will be able to advocate on your behalf. A skilled litigator will ensure your retirement savings are protected.

At RM Law Group, LLP, the experienced team of attorneys are dedicated to helping clients reach a favorable outcome in their divorce. If you have concerns regarding your retirement plan or pension, obtain the support of a knowledgeable attorney. Consider obtaining the support of RM Law Group, LLP for support. Call today or schedule your complimentary consultation by contacting the firm here.

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