Divorce can affect people financially in more ways than they often consider. As such, when going through a divorce, it is important to be well informed, especially where retirement benefits are concerned. Most assets acquired during a marriage are considered community property in Nevada.
Community property means that the asset belongs to the community (both parties to the marriage) equally, as opposed to one spouse separately. When a court considers the division of assets, it first decides whether assets belong solely to one party or whether they are community property. It may be tempting to think that retirement benefits, IRA accounts and 401k accounts are linked specifically to one person, but court cases have established that benefits and money earned during the course of a marriage are community property. Therefore, they must be divided in the event of a divorce. However, how these benefits are divided will vary to some degree.
When splitting up 401k and IRA accounts that were started prior to marriage, the court will applies the time apportionment rule. This rule takes into consideration the amount of funds earned prior to marriage and separates them from the funds earned during the marriage. A Qualified Domestic Relations Order, or QDRO, is a legal document that must be provided to the 401k provider, detailing how the assets are to be divided.
It can be difficult and confusing to determine how these sorts of assets are to be divided, especially when going through something as emotional as a divorce, so it is important to have a qualified attorney help you through those aspects of a divorce. If you are going through a divorce, contact the attorneys at Bellon & Maningo, Ltd. to assist you.