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You and your spouse have been jointly planning on retirement for years. Now that you are filing for divorce, your future is unpredictable. While you may be ready for a fresh start, you may also be concerned about your future retirement prospects.

Are pensions, 401k accounts and IRA assets divided? Will you still be able to retire at the age you desire? If you are dependent on your spouse’s employment, will you have to return to work?

The future of your retirement assets

Generally, all retirement assets accumulated during marriage are subject to California’s property division system. As a community property state, California courts will equally divide your retirement accounts, regardless of which spouse technically earned them.

Any retirement funds or benefits earned prior to marriage, or after your separation, are typically considered separate property, and go in full to the working spouse.

What if you have a prenuptial agreement?

If you and your spouse signed a valid prenuptial agreement prior to marriage, retirement assets will be divided according to your agreement, not California law. The court will carefully examine and determine the validity of your prenup before executing your divorce’s property division process.

How are retirement accounts divided?

Many non-working spouses are concerned that they will not receive a fair payout from their spouse’s employer. To prevent all retirement payments from going directly to the employee, a divorce attorney can establish a Qualified Domestic Relations Order (QDRO). This plan tells the employer how to provide benefits to the non-employee spouse to establish a separate retirement account and protect their financial future.

QDROs do not apply to government or military pension plans. Separate action must be taken in these circumstances.

Retirement division looks different depending upon your circumstances

Asset and retirement division is very complicated – especially for established, high-asset couples. The process can drastically vary depending upon your holdings and specific circumstances. A final settlement can be very difficult to predict. An experienced divorce attorney can carefully analyze assets and options to prevent errors and protect long-term financial interests.

Retirement division in conjunction with the remainder of your asset division, custody and alimony orders will all impact your future financial position and your new retirement plan.