07 Apr Accessing Retirement Funds Under the CARES Act
April 7, 2020
On March 27, 2020, President Trump signed into law The CARES Act which is designed to provide emergency assistance to Americans affected by the coronavirus pandemic. In addition to the provisions described in previous blog entries, this legislation relaxes limitations on access to retirement funds which could be useful to parties in family law cases.
Waiver of Withdrawal Penalty
In many family law cases, the penalties associated with early access to retirements funds present an obstacle to using those funds to pay marital debt or costs associated with the proceeding such as fees for attorneys, experts or mediators. The CARES act temporarily waives the normal 10% early withdrawal penalty for retirement accounts, allowing for easier access to those funds. While the funds will still be taxed, the taxes will be spread out over a 3-year period.
401(k) Loan Limits Increased
In addition, the CARES act temporarily increases the amount that a participant in a 401(k) can borrow from that account from $50,000 to $100,000. This change will give parties to a family law matter increased flexibility in accessing 401(k) money for desired purposes.
To find out if you are eligible to take advantage of these provisions and whether they might be used to your advantage in your family law matter, contact a member of the BKR Family Law team to discuss your specific circumstances and develop a strategy for your case.
Melissa J. Avery, Of Counsel
Immediate Past Chair, American Bar Association Family Law Section
Fellow-American and International Academy of Family Lawyers
Certified Family Law Specialist-Family Law Certification Board
Registered Domestic Relations Mediator
Broyles Kight & Ricafort, PC
8250 Haverstick Road, Suite 100, Indianapolis, IN 46240