When a Pennsylvania married couple seeks a divorce, they may have to create a Qualified Domestic Relations Order. If one person has a retirement account, their spouse may be entitled to assets in the account. Retirement accounts usually have early-withdrawal penalties, but a QDRO prevents these fees from being assessed if they are paid out as a result of a divorce.
A QDRO also allows for assets in a retirement account to be paid out to individuals who are not named as beneficiaries. Payees may include a person's ex-spouse as well as a child or dependent. Assets from a retirement account can go to a range of expenses, including alimony or child support.
The amount of money that someone will be obligated to pay out of their retirement account will depend on several factors, including which other assets a person's spouse is taking with them. Pennsylvania is an equitable distribution state, meaning that the division of assets is decided in a fair way and does not necessarily mean that a person will get half of a couple's marital property. Therefore, people may not be entitled to half of a spouse's retirement account assets.
During a divorce, both assets and liabilities will be split up. This means that even if a credit card is in one person's name, their spouse may still be obligated to pay off part of what is owed on the card. As a result, it's important to understand how asset division works and what property or debts that someone may end up with after their marriage ends. A lawyer could explain how the process works as well as what determines if something is or is not a marital asset.