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What will happen to my retirement savings in my divorce?

Every couple who has been married for a long time will have a different situation as it applies to their retirement savings. In some cases, the couple will not have any retirement savings at all. In other cases, both spouses will have their separate IRA, 401(k) and investment accounts. In still other cases, one spouse will have the IRA or 401(k) in his or her name, and the spouses will share several other investment accounts in their joint names.

Regardless, if you or your spouse have retirement savings held in any investment account, the task of dividing these assets can be complicated.

How a court will divide your retirement assets

It doesn't matter if you or your spouse earned the money. Financially speaking, if the money was earned during the course of your marriage, that money will probably be a part of the marital estate. In terms of the retirement assets that you saved and earned in this regard, here's some important information you might want to know:

What if the account is in my name? The court will divide the retirement savings earned while you were married between you and your soon-to-be ex. Even if the retirement account is in your name -- if you added earned money to this account while you were married -- it's not likely you'll get to keep all of it.

What if the money was mine before marriage? If you started your marriage with money of your own and you kept that money in an individually-named account, this money will probably remain yours. However, if the money increased in value due to investment profits, this rise in value could become a part of your marital estate and be subject to division.

What about corporate, government or military pension plans? These plans may also be a part of your marital estate. If the plan pays out a lump-sum distribution at a certain time, this distribution will be divided according to your negotiated asset division settlement in your divorce, or according to a judge's ruling on the matter. If the plan pays out periodic monthly or quarterly retirement payments, then you and your spouse will probably end up splitting those payments somehow.

Learn more about your asset division rights

The more you understand your rights regarding asset division and retirement assets, the less likely you'll get taken advantage of during your divorce proceedings. Be sure to handle this part of your divorce carefully and with an eye for detail. Your financial future depends upon it.

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