If one spouse earns retirement benefits during a marriage, the other spouse has a marital interest in those assets. In other words, retirement accounts are subject to division following a divorce even if the account (e.g. pensions, 401(k) or 403(b) plans, traditional IRAs, and Roth-IRA) is only in one spouse’s name. This can be a difficult process, especially if the account at issue existed prior to the marriage.
However, if any benefits were earned during the marriage, these retirement accounts are considered marital property. Divorcing couples may also agree to split up these accounts or use them strategically in an overall property settlement.
If you are going through a divorce and wondering whether or not to continue contributing to your retirement account, you should consult with your attorney because the answer will depend on your specific situation.
In general, however, you should continue to contribute the same amount and the same percentage that you were contributing during the marriage, unless you are not able to meet your ongoing necessary living expenses. This will ensure that the status quo remains the same and prevent the opposing side from arguing that you stopped contributing in bad faith. Further, if you stop contributing to these accounts, you will still be asked to provide an accounting of the funds that you are saving by stopping the contributions.
Dividing retirement accounts can be a complicated process during a divorce, especially because these assets often make up a substantial portion of the marital assets. However, it is important to keep in mind that as long as the asset is marital, the Court must award an equitable division of property.
Dealing with retirement accounts during a divorce can be challenging. If you are unsure about how your retirement plans might affect your separation, an experienced attorney can help guide the way. At Clausen & Hassan, our lawyers pride themselves on how they serve our clients. Please reach out today for your free consultation—you can call our office at (651) 647-0087 or contact us by email at email@example.com.