San Jose Retirement & Pension Division Attorney
California is a community property state. This means that assets acquired during the marriage are generally considered to be the property of both spouses and are subject to equal division in the event of a divorce. This includes retirement accounts and pensions accrued by either spouse during the marriage.
This means that you may have to split up your retirement if you decide to end your marriage – that is, unless you can offer a different asset of similar value. The truth is that many divorces involve splitting pensions and other retirement benefits, which can be a hard pill to swallow if you are close to retiring.
If you are divorcing and have these assets, you likely have questions. Get solid advice from an experienced San Jose retirement & pension division attorney from Foster Hsu, LLP.
What to Consider Regarding Retirement Benefits and Pensions
When it comes time to split your assets, there are many things to consider when it comes to retirement accounts. They include the following:
- Valuation of retirement and pension accounts. The first step in dividing retirement and pension assets is to determine their value. This may require obtaining statements and documentation from retirement account administrators or pension plan administrators.
- Qualified domestic relations order (QDRO). In many cases, retirement plans and pensions require a QDRO to divide benefits between spouses. This is a court order that establishes the non-employee spouse’s right to receive a portion of the benefits payable under the retirement plan.
- Division of benefits. Once a QDRO is prepared and approved by the court and the retirement plan administrator, the benefits can be divided between the spouses. The division may involve a lump-sum payment, a division of future benefits, or a combination of both. This will vary based on the plan. It’s important to understand how the plan works because it affects how you’ll divide up the assets.
- Tax implications. Different types of retirement accounts (such as traditional IRAs, Roth IRAs, 401(k)s, and pensions) may have different tax treatment upon distribution. A tax professional can help you understand the tax implications of dividing retirement and pension assets.
- Spousal support. The division of retirement and pension assets may also impact other aspects of the divorce settlement, such as spousal support. Courts may consider the value of retirement assets when determining spousal support obligations.
- Legal assistance. Dividing retirement and pension assets in divorce cases can be complex. It’s often advisable for spouses to seek the assistance of lawyers and financial planners or accountants.
Contact Foster Hsu, LLP Today
Nobody wants to give half of their retirement account to an ex-spouse, but that’s the law. Whether you are giving or receiving it, make sure you understand all the implications involved.
The team at Foster Hsu, LLP can answer your questions and help you plan for the future. To schedule a consultation with a San Jose retirement & pension division attorney, fill out the online form or call 408-841-7200.
