PRACTICE AREAS
Learn more about RETIREMENT
A Few Preliminary Notes: The answer to nearly every question related to family law often starts with, “It depends…” This is because the application of the law in family law matters depends on various factors, many of which are unique to each situation. Family law issues rarely have clear-cut answers, and no attorney can guarantee a specific outcome. If anyone tells you your case is a “slam dunk,” it’s a good idea to seek a second opinion. Be cautious about the advice of friends and family as well—they may have good intentions, but their experiences may not apply to your specific circumstances.
The answers below provide general information based on Maryland law and our experience with divorce cases. Our goal is to help you understand the fundamental aspects of divorce in the state of Maryland.
FREQUENTLY ASKED QUESTIONS
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In Maryland, retirement assets are generally considered marital property to the extent they were accrued during the marriage, regardless of whose name the account is in. Any portion earned before the marriage or after the date of divorce is typically considered non-marital and may be excluded from division, provided it can be properly traced.
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Maryland follows an equitable distribution model, meaning the court divides marital property fairly—but not necessarily equally. The court considers factors such as the length of the marriage, contributions of each party (monetary and non-monetary), and the circumstances leading to the divorce when determining how retirement assets should be allocated.
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A Qualified Domestic Relations Order (QDRO) is a legal order required to divide certain employer-sponsored retirement plans, such as 401(k)s and pensions. It allows for the transfer of funds to a former spouse without triggering taxes or early withdrawal penalties, so long as it is properly drafted and approved by the plan administrator.
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No. While IRAs can still be divided as part of a divorce, they do not require a QDRO. Instead, they are typically divided through a transfer incident to divorce. However, the division must still be handled carefully to avoid unintended tax consequences.
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Military retirement benefits are considered marital property to the extent they were earned during the marriage and are subject to equitable distribution in Maryland. These benefits are governed in part by federal law under the Uniformed Services Former Spouses’ Protection Act, which allows state courts to divide military retired pay. A court may award a percentage of the marital portion of the pension to the non-military spouse. If the marriage lasted at least 10 years overlapping with 10 years of military service, the Defense Finance and Accounting Service (DFAS) can make direct payments to the former spouse. Otherwise, the service member is responsible for making payments. Proper military pension division orders must be prepared to ensure compliance with federal requirements.