How Are Pensions Divided During A Divorce?
Pensions, 401(k) accounts, IRAs, military pensions and other retirement accounts are often the most significant marital assets to be divided in divorce. To ensure that you receive everything you are entitled to, it’s important to seek guidance from an experienced lawyer.
At Rowe Law Offices, P.C., our attorneys offer a free initial consultation to answer your questions about division of pensions and other retirement assets. From our offices in Wyomissing and Lancaster, Pennsylvania, we serve Berks, Lancaster, York, Schuylkill and Lebanon counties and the Lehigh Valley.
Are Retirement Assets Marital Property?
With few exceptions, all assets accumulated between the date of marriage and your separation date are marital property — and are subject to equitable division. Even if the retirement asset is in your spouse’s name only, you are entitled to your share.
Retirement assets earned before the date of your marriage are considered separate property and do not have to be divided. As a result, a pension or other retirement account may be both a separate and a marital asset. Our lawyers use experts to determine what portion of a retirement asset is marital property.
How Are Retirement Assets Divided?
Pensions and other employer-sponsored retirement assets are divided using a qualified domestic relations order, or QDRO. A QDRO is a court order that recognizes the right of an alternate payee to a portion or all of an employee’s pension or other retirement account. The QDRO must meet specific legal requirements and be filed with the benefit payer.
Retirement benefits are typically paid at retirement. While assets such as 401(k) accounts may be paid before retirement, early withdrawal penalties may apply.
There are many ways that you and your spouse can achieve an equitable distribution of marital property. For example, if your spouse wants to keep his or her retirement benefits, he or she could swap assets of equivalent value. It’s important to consider any tax implications when swapping assets.