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While most people expect divorce to be emotionally taxing, many are unprepared for the financial toll it can take. There are several money-related issues to consider when your marriage is ending, but one of the most crucial involves retirement benefits. These funds are often among the most valuable marital assets to be divided in a divorce. Unfortunately, they’re also complex, and it’s easy to make a costly mistake that keeps you from receiving a fair settlement or judgment. Consulting a divorce attorney will help you avoid common pitfalls and provide you with a realistic idea of what to expect. Below is an overview of what happens to retirement accounts in divorce.

How Divorce Affects Retirement Benefits 

Dividing 401(k) & IRA Accounts 

There are a couple of ways that 401(k) and IRA retirement accounts can be divided during the divorce process. Typically, a Qualified Domestic Relations Order must be filed to obtain a court order for splitting retirement plans between both parties. These are complicated documents with several technical rules; therefore, it’s best to enlist the help of a divorce attorney.

Nebraska is an equitable state, which means marital property is divided in a fair and reasonable manner. Any retirement benefits accrued during the marriage are considered part of the marital estate and are subject to equitable division. Alternatively, an agreement may be negotiated that allows one spouse to keep the accounts, while the other spouse is compensated with different assets equaling an equitable split.

Collecting Spousal Social Security Benefits 

divorce attorneyAfter a divorce, you may also be entitled to spousal Social Security retirement benefits. If you were married for at least ten years, both you and your ex-spouse are eligible for Social Security benefits. If the Social Security benefit you qualify for on your own earnings record is less than your ex-spouse’s benefit, you can apply to collect benefits based on your ex-spouse’s earnings record.

Generally, you will receive half of their full benefit amount if you wait until your full retirement age to file; otherwise, it will be a reduced amount. Should you remarry, you will no longer qualify for spousal benefits.

 

To ensure you get your fair share of retirement benefits, you need a skilled divorce attorney advocating on your behalf. The legal team at Payne Law Office will provide you with invaluable guidance through the divorce process and an in-depth explanation of Nebraska laws regarding the division of marital assets. Over the years, they have helped countless residents throughout Lancaster County achieve an outcome that offers financial stability. Call (402) 477-7246 to arrange a free consultation with a proven divorce attorney. 

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