Division of Benefits and Retirement Accounts
Division of assets is one of most complicated aspects of a divorce. It surprises some clients that a retirement account is subject to division by the family court if at least some of it was accrued during the marriage. Because this and other areas of your divorce can be so difficult, it is in your best interests to work with an experienced College Station divorce lawyer.
What Kinds of Retirement Accounts Are Subject to Division?
Any retirement account can be ordered divided by the court. Whether you have an IRA, 401(k), pension, or military retirement, this is considered to be a part of the marital estate and, as such, is included when the judge determines whom to grant which portions of the estate to. However, a number of issues make retirement accounts quite difficult to divide.
How Is Division of Retirement Determined?
Before your retirement can be divided, its value must be determined. This is a difficult matter, as after all, how does the court assess a value to something that will be paid in the future? Retirement accounts are of two basic types:
- Defined retirement benefit plans: These provide the retiree a specific monthly income.
- Defined retirement contribution plans: The amount the retiree receives depends upon the amount that is accrued in the individual account.
The retirement value will be based on the divorce date rather than the date that the beneficiary expects to retire. For this reason, you should expect that the amount divided will not equal the value of your retirement at the time you retire. The reason for this is that you will presumably continue to contribute to the account after the divorce, and thus any benefits accrued from the divorce onward should be kept separate. It is also important to keep in mind that any benefits you accrued before the marriage will not be included in the marital estate.
What Are Some Alternatives to Dividing Retirement Benefits?
The court may decide to grant the spouse that does not have the retirement benefit a greater amount from other parts of the estate instead of dividing the retirement benefit. Also, in some cases, both spouses work and have retirement plans. In such a case it is possible that both spouses will simply keep their own retirements.
Make Sure to Work with a Knowledgeable Attorney
Divorces can be complicated, and such assets as retirement benefits need to be divided equitably. It is very important that you work with an experienced College Station divorce attorney who has will work for your best interests. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.