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Frequently Asked Questions: Divorce And Family Law

Are Retirement Accounts And Pensions Subject To Division?

Yes, such assets are very often the largest asset in a divorce and are subject to division in the divorce.  Most retirement accounts are easily valued and readily subject to division and distribution. A defined benefit plan, however, such as a pension plan, may require an actuary to determine the present value of a future benefit under the plan, and the division of pension plan benefits is often by means of a formula which gives consideration to those plan benefits that accrued prior to the marriage, during the marriage, and that may or will accrue after the marriage has ended. Retirement accounts and pensions are generally divided by mean of a qualified domestic relations order, which allows a retirement account or portion of an account, to be transferred from one spouse to another without being taxed or subjected to an early withdrawal penalty upon the transfer, and a QDRO also allows a retirement account or a pension to be divided in such a manner that each party is taxed only on the retirement or pension benefits he or she actually receives.

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