How are retirement plans divided in a divorce?
You may believe that if your marriage has made it past a milestone, it will last for forever. However, an increase in gray divorce proves quite the opposite. The U.S. has seen an increase in the number of people who are filing for divorce after the age of 60-years, for a wide-range of reasons. When people choose to terminate their marriage later on in life, there are a number of financial concerns that they must address, including that of the retirement plan. Who is entitled to the retirement plan and how is it divided in a divorce? How will you financially survive on your own without access to retirement, pension plans and 401k plans?
The best way to start tackling this often overwhelming topic is to educate yourself on the matter. Any money that is added to a retirement plan during the course of a marriage is often considered marital property and is eligible for division in a divorce. This also includes money added to a pension plan, 401k plan, stock and term life insurance policy.
When a financial plan is separated during the settlement, the court will order a Qualified Domestic Relations Order. This tells the financial company that you, the non-employee, is entitled to a share of the retirement fund, which will be paid directly to you. Before the divorce can be finalized, this information must be completed in full and turned in to the proper financial institutions.
Ensuring that you have financial security after a divorce is vital. Make sure that you get what you are entitled to in the divorce settlement.
This information is intended to educate and should not be taken as legal advice.