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How Can A Divorce Affect My Retirement Plans in Wisconsin?

Posted on in Family Law

Oconomowoc Divorce attorney divorce

When you get married, you expect to be with that person for the rest of your life and live happily ever after. Unfortunately, that kind of fairytale love does not come around very often. In many cases, couples end up succumbing to divorce and end up having to split all of their assets that they acquired during the marriage. Wisconsin follows a rule of equal division, which means that a couple’s marital property is divided in half in most cases.  which simply means that the judge will make a decision based on the facts surrounding the case. Some of the most contested issues are those dealing with finances. If you are close to retirement age, you may be concerned with how your retirement plans will be affected. Thankfully, dividing retirement accounts in Wisconsin can be completed with little to no damages. 

Determining if Retirement Accounts Are Marital or Nonmarital Property

In Wisconsin, the first thing you should do before dividing your assets is to determine which assets are subject to division. Any property that either spouse brings into the marriage, along with a few exceptions for property acquired during the marriage, is not subject to division and will remain that spouse’s property. Exclusions from the marital property include any property that was acquired as a gift, property that was acquired because of death or inheritance, or any funds that come about as a result of such property.

How to Divide Retirement Accounts

In many cases, at least a portion of your retirement accounts will be subject to division. It is not uncommon for spouses to bring a retirement account into the marriage. The amount of money in the account at the beginning of the marriage is not subject to division. However, in many cases, the money that is added to the account during the marriage is also partly your spouse’s. In the case that you must divide the funds in your retirement accounts, a qualified domestic relations order also referred to as a QDRO, may be able to help.

A QDRO is a court order that states how the funds in a retirement account are to be distributed and allows people other than yourself to withdraw funds. As a court order, the QDRO is a legally-binding document and requires compliance from all parties. A QDRO can clearly state who is to be designated as an “alternate payee,” which accounts they have a stake in, and how much and when distributions should begin. Typically, retirement accounts are not actually distributed until the owner of the account retires and begins to draw from the account themselves.

Our Waukesha, WI Divorce Attorney is Here to Help

When you are a young adult, retirement is likely at the bottom of your list of concerns, but even young adults should ensure that their retirement plans are not derailed because of a divorce. If you are nearing retirement age or you are already in retirement, it is crucial that you do everything you can to protect your retirement assets. At Wolff & Sonderhouse, LLP, our attorneys have decades of experience handling various divorce issues, including retirement issues. To schedule a free consultation with one of our Waukesha County divorce lawyers, call our office today at 262-232-6699.

 

Sources:

https://www.investopedia.com/articles/investing/072915/how-protect-your-retirement-after-divorce.asp

https://docs.legis.wisconsin.gov/statutes/statutes/767/vii/61

https://www.thebalance.com/what-s-a-qdro-2894206

 

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