Thousands of West Virginia couples file for divorce every year. Ending a marriage is not only an emotional process, but it also involves several practical concerns. The division of property can be especially complicated when spouses have money saved in retirement funds.
Equitable division of property
West Virginia family courts divide marital assets using an equitable division model. This system splits assets acquired during the marriage with a focus on fairness. The final division may not be equal, but it represents what the court determines to be a fair resolution based on factors like:
• Length of the marriage
• Age of spouses
• Earning capacity
• Long-term sources of income
Division of a spouse’s retirement fund
In a high-asset divorce, one or both spouses may have money saved in a retirement account. The fiscal rules that create IRA, 401(k) and 403(b) funds can make these accounts difficult to distribute. Parties in a divorce will want to avoid penalties for improper or early withdrawals.
If only one spouse has a retirement account, the other spouse will want to create a new account in their name. Depending on the type of fund, you may need to work with a lawyer to draft a Qualified Domestic Relations Order and move the assets.
What happens when both spouses have retirement accounts?
Both spouses of a high-asset couple may have careers that provide them with retirement accounts. In this case, the court will require a transfer that balances the funds, and the order will move money from the larger account to the smaller one. If the funds stay between retirement accounts, there should be no penalties involved.
Planning for the future
Divorce can have a strong effect on your long-term financial health. Understanding the division of property rules will help you plan for the next phase of your life.