Retirement Assets, Social Security, and QDROs: Your Questions, Answered

 Posted on May 08,2023 in Divorce

Divorcing couples of any age may have questions and concerns about how their divorce will influence their retirement, but this is often an especially crucial issue in divorce cases involving older spouses. Understandably, people want to ensure that they will have access to the financial resources they need in their golden years.

In this blog, we will discuss answers to some of the most frequent questions about how divorce can influence retirement accounts and what you can do if you want personalized guidance regarding your situation.

Does My Spouse Get Half of My Retirement Account?

Retirement funds are treated just like any other asset during a divorce. This means that any retirement funds a spouse acquires during the marriage are included in the marital state. Funds that were acquired before the marriage or after a legal separation are considered separate property. You do not have to share separate property, but it is very likely that your spouse is entitled to a share of any retirement funds acquired during the marriage.

The amount your spouse is entitled to is not necessarily exactly half. Divorcing spouses can work out their own arrangements regarding the division of marital property. For example, one spouse may keep their retirement funds, but compensate the other spouse for his or her share with vehicles, real estate, or other property of similar value. Or, the spouses can divide retirement assets.

If the court determines property division, it will use a legal doctrine called equitable distribution to do so. Marital property is distributed by the court in a way that is fair and reasonable to both parties, but it is not always split exactly in half. Each spouse’s contribution to the acquisition of marital property, the spouses’ financial situations and employability, and several other considerations factor into property division.

How Are Retirement Assets Divided?

Early withdrawal of retirement funds incurs taxes and penalties. To avoid this, retirement funds are divided between spouses using a Qualified Domestic Relations Order (QDRO). A QDRO instructs the plan administrator to pay out some of the retirement funds to an alternate payee, in this case, an ex-spouse.

Can I Receive Social Security Based on My Ex’s Work Record?

If your spouse is entitled to Social Security retirement benefits, you may also be entitled to benefits through him or her. According to the Social Security Administration, an individual may claim Social Security benefits if he or she was married to the ex-spouse for at least 10 years. You also have to be at least 62 years old and not remarried to claim Social Security through your ex-spouse.

Let our Arlington Heights Divorce Lawyer Help You

The division of retirement assets during divorce can be a complicated matter to unpack. Our skilled Arlington Heights divorce attorneys can help. Give us a call at 847-749-4182 to set up your initial consultation today.

Source:

https://blog.ssa.gov/ex-spouse-benefits-and-how-they-affect-you/