{"id":109918,"date":"2023-12-19T14:14:55","date_gmt":"2023-12-19T14:14:55","guid":{"rendered":"https:\/\/namso-gen.co\/blog\/are-annuities-protected-in-a-divorce\/"},"modified":"2023-12-19T14:14:55","modified_gmt":"2023-12-19T14:14:55","slug":"are-annuities-protected-in-a-divorce","status":"publish","type":"post","link":"https:\/\/namso-gen.co\/blog\/are-annuities-protected-in-a-divorce\/","title":{"rendered":"Are annuities protected in a divorce?"},"content":{"rendered":"

Are annuities protected in a divorce?<\/p>\n

Divorce can be a complex and emotionally challenging process, with numerous financial aspects to consider. Among these considerations are any annuities that you or your spouse may have. An annuity is a financial arrangement in which an individual receives a sum of money periodically, usually for retirement purposes. So, when going through a divorce, it’s natural to wonder whether annuities are protected or subject to division.<\/p>\n

The answer to the question of whether annuities are protected in a divorce depends on various factors, including the type of annuity, the state you reside in, and the specific circumstances of your divorce. Generally, annuities are considered marital assets if they were acquired during the marriage, meaning they can be subject to division during divorce proceedings.<\/p>\n

Annuities are typically categorized into two types: qualified and non-qualified. Qualified annuities are purchased with pre-tax dollars, usually through an employer-sponsored retirement plan like a 401(k) or an individual retirement account (IRA). Non-qualified annuities, on the other hand, are funded with after-tax dollars.<\/p>\n

When it comes to qualified annuities, they are subject to a process known as Qualified Domestic Relations Order (QDRO). A QDRO is a legal order that grants both parties involved in a divorce the right to a portion of the retirement plan, including the annuity. With a QDRO, the money in the annuity can be divided between the spouses without triggering any tax consequences. This division is typically done in conjunction with the division of other retirement assets.<\/p>\n

Non-qualified annuities usually do not require a QDRO for division during divorce. However, their distribution is subject to the equitable distribution rules of the state you reside in. Equitable distribution states divide marital property based on what the court deems fair, which may result in each spouse receiving a portion of the non-qualified annuity.<\/p>\n

Now, let’s address some frequently asked questions related to annuities in divorce:<\/p>\n

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