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Are you entitled to your spouse’s retirement when you divorce?

On Behalf of | May 11, 2021 | Divorce

Many people who have retirement accounts work their whole lives and contribute significant amounts of their paychecks to ensure that they have enough to live on once they leave their job. 

Conversations in which spouses mention staking a claim to their husband’s or wife’s retirement generally quickly become contentious. These discussions often bring couples to a divorce attorney’s door.

What happens with a retirement plan when a couple gets divorced?

Retirement accounts aren’t all that different from most other assets that a couple may need to divide when they divorce. California is a community property state. Any assets that a couple acquires during a marriage are marital assets unless otherwise covered by a prenuptial agreement. The court will likely assume that each spouse has an equal ownership stake in an asset and split it accordingly when a couple divorces. 

A judge isn’t always the one who makes final decisions in property division discussions. As a couple, you and your spouse can sit down and negotiate a settlement among yourselves (with the help of your attorneys). This may allow one of you to keep the full retirement plan instead of having to divide it — although the agreement will have to seem like a fair exchange for the judge to sign off on it.

What happens if you must divide the retirement plan?

A judge will need to sign a Qualified Domestic Relations Orders (QDROs) to legitimize the allocation of retirement plan proceeds post-divorce. You’ll need to have your QDRO state that your former spouse plans to have their child support, or spousal support deducted from their retirement account. 

The QDRO should also detail monetary payments that you plan to accept instead of physical property as you finalize your divorce. It should also list any regular payouts that you may receive in exchange for giving up your share of the family home or business.

Learning more about QDROs

QDROs are only applicable to retirement plans covered under the Employee Retirement Income Security Act (ERISA). It is the only lawful way a plan participant may assign their account’s proceeds to someone other than oneself. A property division attorney can help you understand whether a QDRO is right for your situation and aid you in splitting up any other assets you and your spouse may share.