What are Retirement Plans?
Any account or financial asset designed to provide for either party during their retirement (e.g. 401K, pension, etc.), this is a retirement plan and is subject to division in divorce.
🤔 Understanding how Retirement Plans affect your divorce.
If, during your marriage, you or your spouse contributed, using marital funds, to a retirement plan, that plan is an asset and is usually treated as marital property. As a rule, the division of a retirement plan is based on the increased value during the marriage.
When Jerry and Sally got married, Jerry had a 401K through his employer worth about $50,000. Today, through additional contributions and wise investing, the value of that 401K has increased to about $150K.
As they divide their assets, Sally understands that Jerry should be able to retain the original $50,000 that existed prior to the marriage and that she’s only entitled to up to 50% of the added $100,000 in value.