Retirement accounts are one type of property some Massachusetts couples may need to divide in a divorce. To divide retirement accounts, it is necessary to complete paperwork to ensure that tax penalties are not levied. For an individual retirement account, a transfer incident is necessary. For an employer-sponsored plan or a 401(k), a Qualified Domestic Relations Order must be prepared.
Individuals also may choose a distribution option. They can cash out, have the amount rolled over into their existing retirement accounts or take distributions when the person who owns the account reaches retirement. However, one thing to keep in mind is that the type of account affects taxes. A Roth IRA is funded after taxes are paid, but pre-tax contributions fund a traditional IRA, a 401(k) or a 401(b).