Maryland law requires the equitable division of assets in a divorce, including, in many cases, things like pension and retirement benefits earned during the marriage. Sometimes, however, these issues can turn unexpectedly complicated.
Dividing pension and retirement benefits in an Owings Mills divorce may require negotiation that involves other assets. An experienced high-asset divorce attorney could help you navigate these negotiations and ensure you get what you deserve.
Most of the time, the pension and retirement benefits earned during a marriage are considered assets during the Owings Mills divorce process, meaning they will need to be divided along with other property. In some cases, equitable division may result in each spouse taking their own pension and retirement accounts after their divorce. Calculations can turn complicated if only one spouse worked or had retirement accounts, or if one spouse significantly out-earned the other.
Equitably dividing pension and retirement benefits in an Owings Mills divorce can look different depending on the situation. A skilled lawyer could help both spouses understand their rights and options, including how they can best set themselves up for future financial success.
In some cases, former spouses will decide to split their account, with a percentage of it going to each. The portion allocated to the individual not named on the account will generally be deposited into their own retirement account. This strategy typically allows both spouses to avoid potential tax penalties that could impact the overall value of the account. A Qualified Domestic Relations Order can be used to order the account administrator to pay out the amount owed to the non-earning spouse.
In the case of pensions and some other types of accounts, former spouses may use a present value calculation to factor in not only the current value of the account, but what it will likely be worth in the future. When considering an equitable division of assets, this strategy often makes it easier to ensure that each spouse gets a fair share of the account.
While some spouses may simply split the retirement accounts or the value of the pension down the middle, others may employ a buyout solution. In such cases, the non-earning spouse may choose to accept other assets that have the same general value as those pension and retirement accounts, considering the accounts’ future earning potential and their value in retirement years.
Cashing out other assets, especially real estate, to offset retirement and pension accounts can increase potential tax penalties. However, this strategy can also allow the partner who earned and contributed to the pension to retain their retirement savings and plans. An Owings Mills attorney could examine the assets involved in your divorce to determine the best technique for dividing pension and retirement benefits.
If you are in the midst of a high-asset divorce, properly dividing assets is essential. Dividing pension and retirement benefits in an Owings Mills divorce can quickly turn into a point of contention, making it difficult for either party to get the results they want or need. At Nguyen Roche Sutton, we understand the challenges that can arise when significant assets are involved. We will work with you to ensure you get a fair outcome, so contact us today to learn more.
