For many, retirement assets make up a sizeable portion of their overall wealth. Understandably, if you are filing for divorce, you likely have some concerns regarding these assets and whether they will land on the chopping block as you begin the process of dissolving your marriage. The short answer is, yes, you must divide your retirement assets in a divorce unless otherwise stated in a marital agreement. To effectively divide them without incurring an early withdrawal fee, you will need a Qualified Domestic Relations Order (QDRO). QSROs only apply to retirement plans covered by the Employment Retirement Income Security Act (ERISA) and cannot be used to divide assets in an IRA account.
Dividing retirement plans, especially pensions, in a divorce is a tricky task. Pensions build up unevenly throughout the span of a person’s employment and are generally not payable until far into the future, when the individual retires. To divide this asset, the court might give the non-employee spouse a portion of the pension when the employee spouse retires. Another option may be to assign a monetary value to the non-employee spouse’s portion and award that value by providing another marital asset. For example, if your portion of your spouse’s retirement plan is valued at $65,000, a judge may award you a different asset or assets that are comparable in value.
In some cases, a judge might not divide employer-provided retirement plans at all. If you and your spouse have similar plans and contributed a similar amount, a judge might award your respective plans to you and your spouse, preventing any disruptions in your accounts. If you do not have comparable retirement plans, but still wish for your retirement benefits to remain intact, you can offer your spouse another asset to make up for it.
If you are getting a divorce and have concerns about your retirement assets, you need to hire a skilled legal advocate to represent you. At Dale L. Bernstein, Chartered Law Office, our knowledgeable divorce attorney has more than 33 years of experience and has assisted many clients navigate this complex legal process. You may not retire any time soon, but you should still do what you can to protect these vital assets.
Get started on your divorce case today and contact our law office at (727) 862-4411 to set up a consultation with our trusted family law attorney.