If a spouse earns retirement benefits during marriage, the other spouse has a marital interest in such assets. As a Minneapolis Divorce Lawyer, I’ve seen many misconceptions to believe that retirement assets are individual assets simply because the individual earned them. Minnesota law is very clear in that if a spouse earns retirement benefits during marriage, the other spouse (just through the fact that there is a marriage) has a “just and equitable”share in those retirement assets.
Assume that a divorce takes place and the wife had a 401(k) plan worth $100,000. Further assume that all contributions (whether made by the wife or wife’s employer) occurred after marriage. In this case, the entire $100,000 is going to be treated as “marital” in nature.
Minnesota law calls for a “just and equitable” division of marital property. Therefore, in the example referenced above, the wife and husband would be entitled to a just and equitable division of the 401(k) plan. Typically (although every case is different), a just and equitable division may mean that the marital asset be divided in one-half. Consequently, unless other extenuating circumstances were present, both husband and wife would each have a reasonable claim for $50,000 of the wife’s 401(k) plan.
The bottom line is that all retirement assets or retirement benefits (including 401(k) plans, 403 (b) plans, Individual Retirement Accounts, Pension Plans, etc) are all marital assets so long as the benefits were earned during marriage. The title of the retirement accounts is irrelevant. Therefore, just because the husband has a retirement account only in his individual name, does not mean that the wife does not have an interest in it. The proper inquiry begins with whether the retirement asset is marital in nature, and the analysis ends with a “just and equitable” division of this marital property.