What happens to your retirement accounts during a divorce?
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What happens to your retirement accounts during a divorce?

| Mar 23, 2021 | Family Law

Virginia usually considers the retirement savings that you accrued during marriage as marital property, which means the judge will most likely divide these accounts. Some exceptions are if you have a premarital agreement, postnuptial agreement or a divorce settlement.

Other exceptions

Virginia family law considers inheritances and third-party gifts as separate property. If you earned your entire retirement savings before the marriage, you keep the entire account during a divorce. Most couples have a hybrid pension, meaning that they earned part of it after marrying. Virginia only divides the portion of your retirement savings that you earned during the marriage. Make sure that you have evidence to prove what is yours to the court.

Division limitations

Non-employee spouses can’t receive more than 50% of the marital retirement savings in a divorce. If a working spouse only generated 30% of their retirement account during marriage, then the non-employee spouse could only receive a maximum of 15% of those earnings. The judge determines what percentage each spouse receives — in line with Virginia’s family law — when the couple can’t come to their own agreement.

Divorce settlement

Couples in Virginia have the right to negotiate how they want to divide their properties and assets in their divorce settlement. You could keep your entire retirement account this way. If you have trouble negotiating, you can have a professional mediator assist you and your spouse in coming to an agreement that makes both of you happy. Taxes are something to consider when dividing your assets, so you must remember to think about what method allows both of you to walk away with the most money.

Ideally, you and your spouse will determine how you handle your retirement accounts and other assets for the divorce. When you two don’t come to an agreement, the judge will have to decide. There is no set percentage on how the court divides the retirement earnings.

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