Marital property includes all assets obtained during a marriage, whereas non-marital property is everything owned before marriage. For middle-age to older adults, aside from real property, savings are the largest aspect of marital property. A survey by the American Academy of Matrimonial Lawyers found the division of retirement plans and pensions was the second-leading cause of contention in divorce.
Do Retirement Plans and Pensions Get Divided During Divorce?
Retirement accounts, pensions, and IRAs are all considered marital property if they were obtained during the course of the marriage, or if they were contributed to during the marriage. For example, if an IRA started out at $10,000 before the marriage, and it was worth $100,000 after 20 years of marriage, the majority of the assets would be considered marital property and should be divided between the two spouses.
401(k) Accounts
Splitting a 401(k) account can be complicated, and technically comes after divorce. After the marriage has been dissolved, a qualified domestic relations order (QDRO) must be filed, which is not part of the divorce agreement. The QDRO must reflect what was outlined in the divorce agreement. Each retirement account needs its own QDRO, and each QDRO must be reviewed by an attorney.
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