If you’re considering divorce, one of many things to consider is a division of retirement assets between you and your spouse. Many large and small companies offer employees 401ks, IRAs, and occasionally pensions as part of their overall compensation package. Government employers also offer similar retirement benefits, albeit under different names, such as Thrift Savings Plans or Basic Benefit Plans under the FERS (Federal Employees Retirement System).
Generally speaking, the part of a spouse’s retirement account subject to distribution as part of a divorce proceeding is the marital share, which is generally defined as the amount of money earned by the account, or the benefit accrued, during the length of marriage, from date of marriage to date of separation. Monies or benefits accrued before the marriage, or after the date of separation are not subject to distribution as part of a divorce.
401ks and pension plans will be subject to a division and distribution to a former spouse under a Qualified Domestic Relations Order (QDRO) or Approved Domestic Relations Order (ADRO), which can only be entered after a Final Decree of Divorce is entered by a Court. IRAs tend to be simpler, with many companies requiring their own form for transfer to be filled out, not necessarily requiring a Court Order to effect the distribution. Each retirement plan is governed by precise terms for inclusion in a QDRO or ADRO, so it’s important to tell your attorney what plans you have, and to give your attorney a copy of the plan documents so that the QDROs and ADROs can be drafted accurately.
If you have questions regarding retirement account divisions and divorce, please give us a call at 804-423-1382 or send us an email at info@wmmlegal.com.
