When a couple seeks a divorce, the Missouri law divides all marital property and finances. Real estate, personal property, and finances, including pension and retirement benefits are all divided by the Missouri court on the basis of equitable distribution. These tangible assets, if not managed well by the attorneys for the individual spouses, can result in added disputes, prolonging a divorce case. It is therefore essential for divorce seekers to have a clear understanding of how such benefits are assessed and divided by the Missouri law.
It is important to understand certain terms and how the Missouri court works.
According to Missouri law, only those pensions and retirement benefits can be considered as marital property that was accumulated during the marriage.
Most retirement plans and pensions acquired post-marriage can be designated as marital property. Other plans such as a Simplified Employee Pension plan, 401k accounts, 403(b) accounts, and simple and traditional IRAs also follow this rule.
However, if a spouse has a retirement plan through the Public School Retirement System pursuant to Section 169.572 RSMo “in lieu” of accumulating credits towards social security benefits, it stands as an exception to the rule, as was ruled in a 2003 case – ‘In re the Marriage of Woodson’.
The Qualified Domestic Relations Order, or the QDRO, are the directions the court sends to the administrator of a retirement plan. It outlines how the benefits of the retirement plan should be divided between the ex-spouses. The QDRO is often used for qualified defined benefit and contribution plans. These include the SEPs (Simplified Employee Pension Plans) 457s and 403(b) s.
The QDRO uses one of the following methods to divide pensions:
Ideally, a QDRO should be drafted as part of the divorce settlement awarded by the court. This enables the court to approve the QDRO when it enters the divorce decree.
A QDRO should be carefully drafted with the name and address of each spouse, the amount and percentage that each should receive, the time period it stands effective and the pension plan that it applies to.
IRA funds can be transferred from one spouse’s IRA account to other spouses IRA account with tax-free consequences. However, this needs to be done in a well-structured manner to avoid tax penalties.
A family law attorney should be someone you can trust to help you through some of the most difficult times in your life, as well as one of the people you want next to you to celebrate triumphs. At The Betz Law Firm, we are committed to guiding our clients through the court process with the same level of professionalism that we would wish for our own family members.
Call us today for a free 30-minute phone consultation at (314) 801-8488 or fill out our online contact form.
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