When the participant spouse's benefits are vested, liquid and available for withdrawal, all or a portion of the benefits can be transferred to the non-participant spouse.

Under this method, the present value of the participant spouse's benefits is computed with the participant spouse retaining those benefits and an equivalent amount of other marital property transferring to the non-participant spouse.

With this method, the court retains jurisdiction until the benefits become currently payable. Benefits are then divided.

Under this method, the non-participant spouse is given the right to receive all or part of the benefits as an alternate payee under a "qualified domestic relations order" (QDRO). The QDRO is a judgement, decree, or court order, including an approved property settlement agreement, that is issued under the domestic relations law of a state. A QDRO gives a spouse, former spouse, child, or dependent of a participant in a retirement plan the right to receive as an alternate payee all or part of the benefits that would be payable to the participant under the plan. QDRO's can also be used to enforce an obligation to pay spousal and child support.

Transferring a taxpayer's IRA to their spouse or former spouse, under a decree of divorce or separate maintenance or a written instrument incident to divorce, is not considered a taxable transfer. Starting from the date of the transfer, the IRA is treated as the spouse's or former spouse's IRA.

Choosing the correct path for dividing retirement assets can be complicated and tricky. Current and future financial needs and goals must be considered along with the income and estate planning goals of the parties. When choosing between the present and deferred division methods, spouses should consider the following arguments: