Retirement Benefits and Divorce

Divorce is a strenuous process for all parties involved. When on this route, there are many things to consider and prepare for. When it comes to what happens to your retirement benefits in the event of a divorce, many factors come to play.

It is crucial to understand how your retirement and pension plans may be divided, as well as expected new responsibilities once your marriage ends. For many, retirement may seem like a distant thought, but it is vital to be mindful of the impact of divorce on your immediate and long-term financial future.

What Retirement Benefits Include

Retirement benefit includes:

• 401(K) accounts
• Individual Retirement Accounts (IRA)
• Pensions, and
• Other retirement savings plan

For a retirement account not to be subjected to division upon divorce, the account must have been established before marriage. Also, there must be no contribution from the other spouse, or it will lose its status as a personal asset. A typical example is when you have a rollover IRA or 401(k) set up before marriage.

Also, ensure that you keep copies of statements of these accounts up until the date of your marriage. It will prove that the asset is not a marital asset but your personal property. Ensure you give copies of these statements to the lawyer handling your case, as it will help protect your interest.

When a retirement account is subjected to division in divorce

Any account acquired during the marriage is subjected to division. If the parties involved want to avoid dividing their assets tied to professional practice or business, a 50-50 division is not applicable. In most cases, the court may award more than 50 percent of the assets to one spouse’s retirement benefits.

Hiring an experienced family lawyer

Hiring a good family lawyer to protect your interest is always the best call. If your ex has a lawyer, there is no reason why you shouldn’t. Some divorcing couples nearing retirement are often open to a collaborative divorce due to the added maturity being a 50-plus.

It could make the process go a lot smoother, thereby ensuring that both parties move on with their lives as quickly as possible. No matter what happens, don’t overlook hiring an experienced family lawyer.

If you’re currently battling divorce and your retirement benefits are in question, do well to call or fill out our form. Our experienced lawyers will ensure your best interest is protected.