Equitable Distribution Doesn’t Mean 50-50
When couples divorce, whatever retirement benefits they shared are treated as an asset that is subject to division just like any other asset, such as property, a business or shared bank accounts. Even if only one spouse had an employer-sponsored retirement plan, the non-employee spouse will still be entitled to half of the funds that accumulated during the course of the marriage. Pennsylvania is an “equitable distribution” state, however, which means that any assets, including retirement benefits, may not necessarily be divided equally in a divorce. For example, in cases where a couple has accumulated significant assets, one spouse may offset keeping the entire retirement account if the other spouse receives another asset of equal value in exchange.
Courts have a good deal of license in Pennsylvania when dividing retirement benefits in divorce. There can be variability in the process; two different judges could make two different division determinations given the same case information. However, courts do generally take several factors into consideration when dividing assets, including the length of the marriage, the ages and health of the spouses, and the earning potential of each spouse after the marriage.
Methods Of Division And Distribution Can Differ
There are several kinds of retirement plans, including pensions, 401(k)s and IRAs. The way the court will divide the assets depends on what kind of plan you have. For example, 401(k)s, pension plans and profit-sharing plans require a specific court order called a Qualified Domestic Relations Order (QDRO) in order to divide retirement assets. These orders can be very complicated and particular, which is one reason it’s so important to have an experienced family law attorney to navigate the process of dividing your retirement assets. Asset distribution methods can also vary. In some cases, the retirement fund can be cashed out and divided; in other cases funds can be rolled over, or held for a deferred distribution after a certain age.
Protect Your Future Now. Contact Us Today.
At Bentley, Kopecki, Smith, P.C., we will evaluate your circumstances during your free initial consultation and provide you with straightforward, practical advice about what you can expect when dividing assets in a divorce. To speak with an experienced retirement asset division lawyer in the Reading or Lancaster, Pennsylvania, area, call our office toll free at 888-320-7928, or write to us online for more information.