Some Minnesota couples who are going through a divorce may be surprised to learn that the portion of their retirement plans that is attributable to contributions made during their marriage may be considered marital assets. Unlike other aspects of property division, there are differences as to how these assets are to be allocated in the event of a divorce. Understanding how different types of retirement assets should be handled under the law can greatly reduce the expense and stress of the divorce process.
A properly-prepared Qualified Domestic Relations Order can help save federal income tax penalties when dividing up a spouse's 401(k), and once issued by the court it will need to be submitted to the plan administrator. An individual retirement account will require a transfer incident to be submitted to the IRA administrator in order to avoidtax penalties resulting from an early withdrawal.