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Photo of Professionals at McCoy Fatula, APC

Splitting retirement accounts as part of property division

On Behalf of | Dec 30, 2017 | Property Division

At the end of a marriage, many couples will be faced with the question of how to separate various types of savings accounts. If spouses have been married for a long time, they may have spent significant time and effort with each other stashing away funds for the impending time of retirement. It is also possible that one partner has focused more heavily on household management while the other earned the lion’s share of the income. In California, this doesn’t necessarily mean that the higher-earning partner will get to keep all the property in his or her name. 

Divorce does tend to bring a financial pinch. At the time of the transition, it is likely that both parties will be looking for some additional cash flow as they stabilize housing, refurnish and pay fees for any professional help they use during this time. If one is lucky enough to have time to plan for the separation, stashing away extra funds and catching up on needed medical treatment, home or car repairs can be a helpful strategy. 

IRA retirement accounts can be split by the divorce decree. Other qualified accounts should be split using a Qualified Domestic Relations Order. One type of account that is typically split via QDRO is the 401(k). If a couple has been married more than ten years before the split, then the lesser-earning spouse will be able to file for Social Security benefits on the higher-earning spouse’s record, unless the lesser-earning spouse chooses to remarry. 

A short summary of the various rules governing the separation of marital property and financial accounts can only scratch the surface. Many people choose to consult with a professional for a full picture of how they may be affected. In California, a person is able to consult with a family law attorney for more help with property division

Source:, “How Divorce Affects Social Security and Retirement Accounts“, Robert Powell, Dec. 15, 2017

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