Depending on where your spouse works or has worked in the past, he or she may have a retirement or pension. If he does, in most cases, those monies are marital property to be divided by the Tennessee Court.

Each company is different and many require certain language be in the Court Order before they will comply with any request for a division. And if your spouse is a Federal employee, State employee or a member of the military – his retirement or pension and its division can be complicated.

Qualified Domestic Retirement Orders are the legal documents we prepare to divide many of the retirement plans in Tennessee. The military requires other documents that we prepare to divide military benefits.

Often clients come to us years later with Divorce Decrees that set out that they were to receive a portion of their husband’s or wife’s retirement, but their attorney never prepared the follow up documentation necessary to divide this retirement or pension. By then it may be too late, as the spouse may have withdrawn all the money.

Don’t think just because your Marital Dissolution Agreement states that you get half of your spouse’s retirement or pension, that it will magically happen. The company or military is not required to abide by your Final Decree unless the proper follow up documentation is delivered to them.

What are the consequences of splitting a retirement or 401k?

Usually, we prepare documents that allow your portion of your spouse’s 401k to be moved into your own individual account. From there, you may be allowed to leave it with the company or move it to your own retirement company.

Often, if you choose to leave the money in the retirement account, you won’t be charged except possibly a few dollars for administration company costs to accomplish the split into two accounts. However if you choose to cash out the money – then you could be faced with penalties and taxes for an early withdrawal of retirement monies.

It’s important that you know as much as possible about your retirement accounts and your spouse’s accounts, before you meet with your attorney. These accounts are often one of the most valuable assets in a divorce. Therefore it’s important that your attorney understand what you each have, so they can be fairly divided.