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Dividing retirement accounts in divorce cases

Unless a couple in Oklahoma has a valid prenuptial agreement stating otherwise, they should expect that if their marriage ends they will be required to divide their retirement accounts in the property division stage of the divorce process. Under Oklahoma law, all amounts that have accrued in retirement accounts during the marriage are considered to be marital property, and the court will order it to be divided no matter who made the contributions.

The law provides that amounts ordered to be paid to a recipient spouse are not subject to early withdrawal taxes and penalties if properly handled. However, it is important that the correct paperwork is filed or penalties may be assessed. If there are several accounts, each one will require its own order.

401(k) accounts, pensions and employer-sponsored retirement plans all require the filing of a Qualified Domestic Relations Order. Individual retirement accounts require a transfer incidence form. These different documents are sent to the plan administrators for the various accounts. They direct the administrator how to divide the funds and what amount to give the recipient spouse. Recipients may choose to roll the amount into their own retirement account. They may also choose to take it as a lump sum or to leave their portion in their former spouse's account to withdraw after they retire.

In a high-asset divorce, determining how assets should be divided can be very complex. A family law attorney may be better able to untangle the finances, track down various accounts and assets and make certain that a divorcing client receives the proper amount. An attorney may also be able to negotiate with a spouse who would otherwise receive part of the client's retirement accounts in order to secure an agreement that the spouse accept a higher percentage of other assets instead.

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