How do I divide retirement?

Courts in Virginia and North Carolina have the ability to divide assets acquired by a divorcing couple which were acquired during the parties' marriage. It does not matter if the asset is only in one person's name. Retirement accounts (pensions, 401k accounts, IRAs, etc.) can be divided by the court, even if the employee disagrees.

The Court can enter an order called a Qualified Domestic Relations Order ("QDRO"), which authorizes and orders the employer or account manager to establish a sub-account in the spouse's name and/or roll over a portion of the account into an outside account for the spouse. If the account is divided by a QDRO there is no current tax consequence to the employee. As long as the spouse places the funds in a proper retirement vehicle, often an IRA, the spouse will not have any current taxable consequence either.

You do not have to cash out an account, incurring taxable income and penalties, in order to divide it. Dividing it with a QDRO allows the parties to divide the asset and delay the taxable event until the account is actually accessed.

What in the world is a 20/20/20 Spouse?

I grew up in a military family, live in a military community, and frequently represent service members and military spouses. Length of military service makes a big impact for military spouses who want to maintain some benefits after a divorce. For a military spouse who was married to the service member for at least twenty years and where the service member served at least twenty years active duty, the spouse will maintain military privileges if there was a twenty year overlap between the marriage and the military service.

The spouse cannot remarry, or the spouse will then lose the military benefits. The benefits to the 20/20/20 spouse are as generous as if the spouse were still married to a retired service member. One of the most important benefits for a 20/20/20 spouse is the retention of military health coverage. Other benefits include PX privileges, Commissary privileges, and use of military bases and facilities. The 20/20/20 spouse will maintain a military ID card in order to access these benefits. The value of these benefits is significant.

Revenge and Forgiveness

I am a divorce attorney. While many of my cases involve people who have already resolved the emotional issues which must be overcome in a divorce, in many cases either my client or her spouse still has emotional work left to do. The legal issues I need to help my client resolve will then take a backseat to the emotional issues and hurt which predominate. Either my client or the spouse is so hurt or angry that the divorce becomes a vehicle for revenge.

I heard this discussion on Speaking of Faith. There is, it seems, a scientific basis which helps us to choose to forgive rather than continue in the quest for revenge. It's an interesting perspective. When my client is able to focus on her future, rather than on punishing her spouse, she is often able to resolve her divorce at a lower financial cost to her. She is able to distinguish which matters really need her investment of time and legal resources and which issues will only distract her and keep her spinning her wheels.

I feel greatly rewarded helping my clients through what is a difficult and often devastating time in their lives, and I love watching them blossom as they find closure and move into their new lives.

Today, consider the cost of revenge.