While saving for retirement is one of the best ways to plan for your financial future, divorce could throw some of these plans askew. Just as with other assets—such as houses, vehicles, and bank accounts—retirement plans are typically considered to be marital property. As such, courts will divide these assets in a way that best reflects the circumstances of the divorce. If you plan on dissolving a marriage, here’s a brief guide on how your retirement funds may be handled and how your family law attorney can assist.

What Happens to Retirement Funds in a Divorce?

Both IRA and 401(k) accounts are subject to division among parties in a divorce. However, for these funds to be considered marital property, contributions must have been made during the marriage. Any contributions made before the marriage are to be kept with the primary account holder.

Depending on the type of plan you have, your family law attorney may need to file what’s known as a QDRO—or Qualified Domestic Relations Order. Essentially, a QDRO is a court order that instructs plan providers—such as employers and banks—on how to dispense benefits when it’s time for retirement. A QDRO may be necessary for 401(k)s and certain pensions. However, they are not generally required for IRA accounts.

Since the value of a retirement account can rise and fall over time, it’s best not to divide them based on dollar amount alone. Instead, family law attorneys typically recommend dividing the asset by a percentage that is approved by the court.

Are Social Security Benefits Divided in a Divorce?

The division of Social Security benefits upon divorce is a little more straightforward than that of 401(k)s and IRAs. According to the Social Security Administration, divorced parties can collect one-half of their ex-spouse’s benefits.

However, to qualify for these funds, the recipient must have been married to the individual for 10 years or longer. The recipient must also not remarry. Funds, however, can be collected if the second marriage is dissolved. If your own Social Security benefits are higher than that of your ex-spouse, you will also be unable to collect.

Recognizing the emotional and practical obstacles that divorce can present, Woodlawn Law Offices takes pride in providing extensive support in all matters of property division. These family law attorneys of O’Fallon, MO will review your assets one-on-one to determine which may be subject to division and make sure they are handled fairly. To learn more about this firm’s expansive practice areas—including estate planning and probate law—visit their website. If you’d like to arrange a convenient consultation with a skilled lawyer, call (636) 240-6667.