Dividing Retirement Benefits in a Divorce

divorce certificate contract pension at home

When a couple decides to divorce, they are legally separating their marriage. That also means separating their financial assets and future as well.

However, some assets aren’t realized at the time of the divorce, such as retirement benefits. Instead, they are available at some point in the future, but this assets-to-be still represent value.

So, the court includes them in the divorce process if the retirement benefits were earned during the time of the marriage. It’s also the reason why a divorce attorney like the Fruchtman Law Firm is needed.

How Are Retirement Accounts Divided in Divorce?

Retirement benefits come in different forms. There are the traditional defined benefits, such as pensions, and then there are retirement accounts, such as 401Ks and IRAs.

The latter is easier to separate because the balance value is known and available to the owner as well as the administrator.

Pensions are harder. Their value is realized over the long term as the pension is paid out, as well as however long the owner lives after retirement. In these cases, the court is deciding how to split the title to the asset-to-be in the future versus the balance that exists.

Retirement Account Documentation Is Easily Obtainable

The beauty of valid retirement accounts is that they have to be declared tax-wise. As a result, they become part of an objective record and are easy to identify in the divorce process, unlike assets that are held via non-traditional means, such as gold. That means they are also very easily discoverable and identifiable in the legal process, leading to the separation of assets. What happens to retirement funds in divorce doesn’t need to be a guessing game. The distribution of retirement assets can be messy. However, with the right representation, retirement accounts can be handled correctly. Fruchtman Law Firm, an Arizona family law attorney, can help.