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Divorce and Your Money - #1 Divorce Podcast

Visit us at www.DivorceAndYourMoney.com Divorce and Your Money is your guide to avoiding costly mistakes during divorce. Shawn Leamon, Certified Divorce Financial Analyst and MBA, wants to help you learn the fundamentals of how to get a divorce. Whether you are looking for an uncontested divorce, a do it yourself divorce, or an online divorce, resources are available to offer guidance. Through his divorce podcast and divorce blog, Shawn offers his professional opinion on the best ways to handle the end of your marriage. He covers topics including how to file for divorce, divorcing a narcissist, and finding the best divorce attorney. Even tricky subjects such as a “what is a QDRO?” and “is alimony taxable?” are tackled through these venues. If you need to know what the first steps are or what you should do to head to trial during litigation, you can find resources to give you a step-by-step guide to what comes next. Think of his advice as an alternative to divorce support groups where you can find exactly what you need when you need it. He offers one-on-one divorce coaching to give you a solid grasp on the decisions that are bound to affect your financial future. Before you have a divorce decree in hand, you will likely go through some type of divorce mediation. For any spouse saying, “I want a divorce,” you need to make sure that you are getting the financial future you are entitled to. Do not allow yourself to be blinded by the emotional, legal, and financial burden that divorce can become. Instead, take control of your situation with sage wisdom to help all individuals make better financial decisions for their independent future. If you find yourself asking “where are the best divorce lawyers near me?”, Shawn can help you to recognize the best of the best. Whether you need a divorce in Texas, a divorce in Florida, or a divorce in New York, you will have all the knowledge you need to find the best team of professionals to assist you. You can start from a place of being legally separated or once you have already started to file for divorce using free divorce papers or an attorney. No matter where you or your marriage may be in the process, Shawn Leamon has professional advice to offer your unique situation. A simple no fault divorce or a high-stakes power struggle are all areas he has vast experience with during his work outside of Divorce and Your Money. Let his advice be a guide to help you get all that you need for a secure financial future in your divorce records. It will not make a difference whether you are getting a divorce in Ohio or a divorce in California if you are following the basic principles set out through Divorce and Your Money’s divorce blog, divorce podcast, and divorce coaching.
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Apr 4, 2017

This article was republished by Investopedia here.

During your divorce proceedings, the division of assets goes beyond household income and bank account holdings. To fairly divide the funds accumulated throughout your marriage, the funds placed in 401(k) accounts will come up as well. Every state has its own specific protocol, but you can confidently head into this process by thoroughly understanding the way courts strive to fairly divide these retirement account holdings for each spouse.

1. Determine Marital vs. Separate Property

The first task in the division of 401(k) accounts is identifying the amount of funds placed in the accounts during the marital period. Funds placed in these accounts prior to the marriage are usually not considered assets eligible for distribution to both parties in the divorce. In general, assets owned by either spouse before the marriage, including 401(k) funds, are considered separate property. However, if you have any 401(k) accounts with contributions made after you were married, you will likely be dividing those funds as part of the marital pie.

2. Calculate the Division of Shared Assets

The state you live in will determine the way your overall assets are divided during the divorce proceedings. In community-property states, the 401(k) funds that qualified as marital assets will likely be split 50/50 between both parties. However, in equitable-distribution states, the judge may split the assets differently because they are looking at the entire picture (although the main goal remains the equal division of assets).

Now is the time to identify all other shared assets that qualify for division between you and your spouse. You do have some leeway in negotiating the way the assets will be divided, if your spouse agrees with the plan. (For related reading, see: Divorcing? The Right Way to Split Retirement Plans.)

3. A Qualified Domestic Relations Order Finalizes the Split

In addition to obtaining a properly completed divorce decree, your lawyer—or an expert retained by your lawyer—must fill out and submit a qualified domestic relations order regarding your retirement account. This document indicates that the account must be split according to the divorce order.

Upon approval by the judge and account administrators, your name will be added on the 401(k) as an additional payee. Since this document finalizes the agreements made prior to it, it must be filed with the court to confirm and enact the distribution plan.

Final Thoughts

With the above steps, you should be able to claim the retirement assets during the divorce that are owed to you. Taking the time to appropriately navigate through the distribution of 401(k) plans that were established during your marriage will help protect your financial future. To avoid serious financial repercussions at the finalization of your divorce, you can work with a trusted advisor. Then you will be sure you have completed each vital step.

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Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

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