Life would be so much easier if we all spoke the same language wouldn't it? But even a common language can't always guarantee that things will go smoothly. Legal terminology is one of those areas where variations can exist. Inconsistencies are not unheard of between courts in Minnesota. And where they exist, it can result in a lot of headaches.
In matters relating to divorce and division of property, variation in the way specific issues are discussed can lead to confusion and misunderstanding. In the case of retirement accounts, such errors can lead to one or both parties suffering a loss of benefits that could alter their lives for the worse.
Such dilemmas can be avoided, but it requires a clear understanding of the rules regarding particular types of retirement funds and then filing all of the correct documents with the right agencies and the court. You have to make sure everyone is in sync on how things will go.
For example, if you and your soon-to-be-ex-spouse have shared a long married life together and have built up a nest egg in one or several Individual Retirement Accounts, division will be subject to a "transfer incident to divorce." However, if you have a defined contribution plan like a 401(k) or some other similar asset, any split will be handled through a "qualified domestic relations order" (QDRO).
If that isn't confusing enough, many courts refer to both processes as QDROs. That fails to note the distinction and if your paperwork doesn't properly delineate the difference, it could mean unwanted problems later.
Because of the inherent complexity of dividing retirement accounts, it is always advisable to work with an attorney who has experience dealing with the process and who can help lay out the best strategy for achieving your desired objectives.
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