How Are Retirement Savings Handled in Divorce?

How Are Retirement Savings Handled in Divorce?

Mar 23, 2024

Retirement savings, often accumulated over many years, are a significant concern in divorce. They not only serve as a financial safety net but also play a critical role in planning for life after work. The decisions made during a divorce can profoundly impact the retirement prospects of both parties. Therefore, addressing retirement savings during the divorce process is of utmost importance. At Robbins & Licavoli, PLLC, we aim to provide valuable insights and guidance to help safeguard your future and find the best possible solutions.

How Retirement Savings Are Divided

Retirement accounts are considered marital property if the funds were obtained during the marriage. If so, they will be divided during divorce proceedings. In Michigan, retirement savings are divided through equitable distribution, in which assets are distributed fairly but not necessarily equally. The court considers several factors when determining the division of these accounts, including the marriage length, each spouse’s contributions to the account, and their future financial needs. For example, if one spouse has little or no retirement savings, they may be entitled to a larger portion of their ex-spouse’s retirement funds. The court may also factor in any prenuptial or postnuptial agreements addressing retirement savings.

Qualified Domestic Relations Orders (QDROs)

A Qualified Domestic Relations Order (QDRO) is mandatory to split most retirement accounts. This court-ordered document outlines the division and distribution of retirement benefits between spouses. It is crucial to work with an experienced attorney when drafting a QDRO to ensure that all necessary information and requirements are met, as any mistakes or omissions could result in significant financial consequences down the line.

Steps To Protect Your Retirement Savings

Divorce can be an emotionally charged endeavor, but it is essential to approach the division of retirement savings with a level head. It may be tempting to try and seek revenge or fight for more than what is fair, but this can ultimately harm both parties in the long run.

The first step in protecting your retirement savings during divorce is to gather all necessary information and documentation regarding your retirement accounts. This includes statements, contributions, and any agreements or plans related to the account. It is also essential to keep track of any changes made during the marriage, such as loans or withdrawals taken from the accounts.

In addition to being proactive about gathering information, it is crucial to work with a skilled attorney who can advocate for your best interests and ensure that your retirement savings are protected. At Robbins & Licavoli, PLLC, our attorneys have extensive experience navigating complex divorce cases involving retirement assets. We understand the importance of conserving your financial security for the future.

Get Started Today

Divorce is difficult, but addressing important matters such as retirement savings is crucial. Our team at Robbins & Licavoli, PLLC, is here to provide the necessary guidance and support to protect your future during this challenging time. Contact us today to schedule a consultation and learn more about how we can help you navigate the divorce process and protect your retirement savings.

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