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How Are Retirement Accounts Divided in a Wisconsin Divorce?

Posted on in Divorce

Milwaukee retirement account division attorneysSplitting assets in a divorce can be a stressful process. In many cases, retirement accounts are some of the most valuable assets owned by a couple, and as with other marital property, they should be divided equally between spouses. Even if you do not expect to use the funds in your retirement account until many years in the future, it is still considered a marital asset that is measured by its current or predicted value. Unless your retirement accounts were established prior to your marriage or are protected within a prenuptial or postnuptial agreement, they will need to be split 50/50 between you and your spouse.

Addressing Common Types of Retirement Accounts

The three major types of retirement benefits that may need to be divided during a divorce include:

  • IRAs - An individual retirement account that can house a wide variety of financial products, including stocks, bonds, and mutual funds. 
  • 401(k)s - A 401(k) plan is a company-backed retirement account that employees can contribute to. In many cases, employers will match a certain percentage of an employee’s contributions.
  • 403(b)s - A 403(b) is a retirement account for certain employees of public schools and tax-exempt organizations. Those who may have a 403(b) account include teachers, school administrators, professors, government employees, nurses, doctors, and librarians.

Splitting Retirement Accounts

Retirement savings can be split in one of two ways:

  • Using a Qualified Domestic Relations Order, or QDRO. A QDRO is the most common approach, as it will specify a certain amount or percentage that will be transferred from an account in one spouse’s name to the other spouse, who can roll these funds over to their own account. When using a QDRO, there will be no tax consequences or early withdrawal penalties, as long as the transfers are done in relation to the divorce. 
  • Offsetting compensation through other assets. A spouse may keep the full amount of funds in a retirement account, while the other spouse may retain ownership of other marital assets of equal value. 

Contact a Milwaukee, Wisconsin Divorce Attorney Today

If you are in the midst of a divorce and are unsure how to divide your retirement accounts or other marital property, the attorneys of Gimbel, Reilly, Guerin & Brown, LLP are here to help. We have worked with hundreds of clients, and we can assess the value of your marital assets and negotiate a settlement that will allow you to achieve success following your divorce. Contact our Milwaukee property division lawyers today at 414-271-1440.

Sources: 

https://docs.legis.wisconsin.gov/statutes/statutes/767/IV/301

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