Individual Retirement Accounts are retirement accounts that people contribute to that are not connected with their employment at all. They’re only in one person’s name. Clients often say that they both have an IRA, but that’s not true. Individual Retirement Accounts are in one person’s name.
Each party can have an IRA and marital money can go into an IRA in one person’s name, but it’s only in one party’s name. A Qualified Pension Plan is something that comes from your employer. These are two different things. The IRAs are not governed by ERISA – the law that governs the employment retirement benefits. IRAs are basically governed by the IRS Tax Code for tax deductible contributions. They are divided not with special court orders but with your final divorce decree and generally a form from your financial house that both parties have to fill out.
Carolyn Grimes is a family lawyer at the law firm of Wade Grimes Friedman Sutter & Leischner PLLC in Alexandria, Virginia. To learn more about Grimes and her firm, visit www.oldtownlawyers.com.