Splitting Retirement Assets in a Divorce
A popular question I often hear in my practice is “can we divide retirement accounts?” Retirement accounts are commonly divided as part of the divorce process. Depending on the type of account, division can be done in either the General Judgment (divorce decree) or by supplemental documents entered by the court after the dissolution itself is finalized. Division of a retirement account due to divorce is not a taxable event, nor is it necessary to request a distribution to pay a spouse their entitled amount.
How Do Pensions Work in Divorce?
Pensions earned during the marriage generally fall into the category of joint assets and are handled along with retirement accounts. The specific laws that govern pensions during a divorce, and their division, are complicated and vary state by state. Ultimately, like retirement accounts, the parties can agree on how to divide the pensions or if an agreement cannot be reached, it is up to the courts to decide if and how pensions are divided. Likewise, waiting until your former spouse retires, which may be after the divorce, is not an appropriate time to ask for pension. It is an asset that must be addressed in the divorce proceeding. Separating retirement assets is a particular area of law that is often handled by an attorney who specializes in it. Your divorce attorney will know who to contact to divide the pension.