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How to Divide IRAs in a Divorce

When you get a divorce, your retirement plans and accounts are treated like most of your other assets. Part will be yours alone and part you must share with your spouse. The amount of money your spouse gets depends primarily on when you started contributing to your individual retirement account (IRA).

Fortunately, the process of splitting IRAs is simpler than splitting other types of retirement assets, but it’s still important to know the rules.

What part of the IRA is a marital asset?

If you started contributing to your IRA before you got married, that portion is separate property and your spouse has likely has no claim over it. The portion your spouse has a claim in is that which accrued after your marriage date. Therefore, you should subtract the value on the date of your wedding from its current value, and the difference will be subject to the asset division process.

The next question, then, is how much of that remaining portion will actually belong to your spouse. In community property states, the spouse will automatically get half, as both spouses are considered to equally own all assets acquired during the course of the marriage.

Minnesota, however, is an equitable distribution state, one of 41 in the nation. Courts will start with the premise that assets should be split down the middle, but then consider whether doing so would be “fair” and what sort of split would result in a more “fair” arrangement given the other circumstances at play in the divorce, such as a disproportionate income capacity.

This means there is no single formula for determining how much IRA money a spouse gets in a divorce in an equitable distribution state. It entirely depends on the other issues at stake in the divorce.

For further guidance on the property division process in a divorce, especially as it relates to retirement benefits, contact an experienced Minnesota family law attorney with Appelhof, Pfeifer & Hart, P.A.

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