Georgia courts practice the equitable distribution of property when presiding over divorce hearings. A fair resolution is sought based on the circumstances of each divorcing spouse.
What exactly does this mean and how does it affect retirement accounts?
The division of marital property in a Georgia divorce must be equitable as opposed to equal. This means that both parties may not get the same thing, but they will get what is fair according to their individual circumstances. An exception exists for any property deemed separate, which would not classify as marital property and not be subject to division in the divorce.
Marital property is usually considered any asset acquired during the marriage, while property owned prior to marriage is commonly excluded from this designation.
Any contributions made to a retirement account during the marriage by either spouse are marital property and subject to equitable distribution. Even if the account is only in one spouse’s name it is subject to division. An exception applies to funds that existed in an account prior to the marriage. These are separate and will not be subject to division.
However, just because retirement funds can get divided it does not mean they always will. The court will consider the financial circumstances of both spouses, as well as other factors. Pension plans, 401(k)s and individual retirement arrangements are all subject to these division rules.
Equitable distribution means that each spouse receives what is fair, and that includes the consideration of retirement accounts.