Dividing Retirement Benefits After a Divorce
As you go through the process of dividing your marital property during a divorce, you will need to take into account the various retirement benefits that you and/or your spouse have accrued. These benefits are considered to be marital property that is subject to the property division process, the same as any other assets that you own. Specific examples of these types of benefits include 401k or 403k plans, IRAs, ERISA funds, military pensions, employee stock option plans, veteran’s educational benefits and more.
There are some types of retirement or employment benefits, however, that are not considered to be marital property. These include social security payments, any type of compensation a military veteran receives for injuries, worker’s compensation disability benefits and more.
Regardless of the length of the marriage, any eligible retirement benefits need to be accounted for in the property division process. A spouse can either waive their retirement benefits or opt for division, but it’s inadvisable for anyone to waive their rights unless they have consulted with an attorney or the costs of dividing the retirement benefits would outweigh the actual benefit received in return.
Division of retirement benefits comes with two additional options; either the benefits can be divided into two accounts, or one partner can buy out the other. In a buy-out situation, the spouse that does not have the benefits would take the value of their interest in the benefits and trade it for something else of the same value, such as other assets or cash.
Dividing retirement benefits in a divorce can be a complex process, so it’s best to work with an experienced family law attorney. Contact the team at Appelhof, Pfeifer & Hart, P.A. for more in-depth information on how you should proceed.