Generally, in divorces in Arizona, the assets and debts are equitably (fairly) divided, which is generally equally divided. For some people, it may be advantageous to receive the retirement accounts, while other people may be frustrated with retirement accounts because they often have a 10% penalty for withdrawals that start before that person turns 59 ½ years old.

In a recent online article, located at, a discussion is held regarding creative ways to use larger retirement accounts to provide cash flow before a party reaches age 59 ½. This is a complex strategy, and before using such a strategy, divorcing parties should make sure to talk this over with both and experienced accountant and an experienced family law attorney.

Under this strategy, with specific IRS restrictions, a party can receive a stream of periodic (usually monthly) income from a retirement account after the divorce for five years or such longer time until the party reaches age 59 ½. If this is properly set up, the 10% penalty for early withdrawal can be avoided. The receiving spouse would still pay income taxes on the periodic income, just as he or she would if receiving spousal support. However, avoiding the 10% penalty will make a significant difference in the value of this periodic income stream.

To learn more about strategies for dividing retirement accounts, or to discuss other family law issues with an experienced family law attorney, contact Douglas C. Gardner, with McGuire Gardner, a division of Davis Miles PLLC, at 800-899-2730, or visit our website at