Dividing Retirement Funds in Divorce
One of the most significant parts of the divorce proceeding is going through the process to divide property and assets. Under Oregon's laws of equitable distribution, each spouse in the marriage receives the amount the court deems fair based on factors such as the amount of property to be divided, the length of the marriage and individual contributions.
Retirement assets and pension plans held by the divorcing spouses may also be included in the property division process.
How does equitable distribution affect retirement plans?
Retirement plans are often one of the largest properties a person possesses. Property refers to anything owned by either spouse, whether it is marital property, or that which has been acquired during the marriage, or separate, which is anything owned outside of the marriage. While separate assets can be divided in divorce, they are less likely to be touched. Division of marital assets will be the main focus of the court, but Oregon does allows for the division of separate property if in the interest of making the estate equitable.
How are retirement plans divided?
Retirement plans will be looked at as any other property. The first step will be to detail what accounts and plans you have and then assign value to the account. Taxes that will need to be paid on the acquired property will also be considered. When a spouse has been paying into a retirement plan before the marriage, some of the retirement plan is separate property and must be recognized as so in property division. Based on these values, the plans will be divided according to a percentage based on what each spouse deserves.
What about employer-sponsored retirement plans?
If a former spouse has an employer-sponsored retirement plan, such as a 401(k) or pension, then both spouses are entitled to a share. Protecting this share can be done by filling out a Qualified Domestic Relations Order, which informs a pension plan how to distribute benefits. However, the Qualified Domestic Relations Order does not apply to military or government benefits and must be filed separately from the divorce petition.
Division of property can be extremely complicated, especially in an equitable distribution state such as Oregon. Such important assets should not be left in the hands of anyone other than an experienced divorce attorney. We invite you to contact us to discuss how to ensure your best interest are taken care of in your divorce case.