Often the largest assets in a marriage are the retirement accounts of one or both spouses. Retirement benefits are subject to division in a divorce. How the retirement benefits are divided depends upon a number of factors, such as whether the retirement benefit was earned or invested during the marriage versus before or after the marriage.
The type of retirement plan is also relevant. For example, a 401(k) is a “defined contribution” plan where money is saved in a tax deferred account which is available after retirement. The amount of the benefit is equal to the amount of money saved. A “defined benefit” plan is a pension plan which pays a monthly annuity upon retirement until death. The retirement annuity in a “defined benefit” plan is dependent upon the plan’s rules, but usually takes into consideration the years of employment, age at retirement, high salary, etc. The considerations when dividing a “defined contribution” plan differ greatly from a “defined benefit” plan.
Accomplishing an equitable division of the retirement accounts is complicated, and best handled by an experienced family law attorney. If you are faced with divorce or legal separation, contact Derek Trosvig at 320-763-3141.
Disclaimer: This article is for general informational purposes only and is not legal advice. For legal advice regarding your particular situation, please retain an attorney as soon as possible so as to not lose any legal rights you may have.