So hard for it, honey
She works hard for the money
So you better treat her right"
In case you didn't recognize the lyrics, they are from the Donna Summer song, "She works hard for the money."
Summer was right. People - men and women - do work hard for their money. They also save hard for retirement.
You've probably stashed as much money as possible in a 401k and IRA, or in stocks, bonds and treasury notes. Instead of traveling to Italy, you visited your in-laws or you camped in Big Sur last summer.
You've done whatever you could to give yourself some assurance that when you turn 60 or 70, you would have sufficient funds to feel comfortable as you age. With your wife or husband, you saved because with the fate of Social Security so uncertain, you would be crazy not to have a retirement fund.
But what if after years of saving, your marriage disintegrates? How would your retirement be divided?
But that's My Retirement Account?
As you proceed through your divorce negotiations, you will need to divide all of your assets. These include retirement savings accumulated during the marriage such as IRAs, 401(k)s, 403(b)s, thrift savings plans, profit sharing, money purchase plans, pensions, stock options, annuities and any other deferred compensation accounts or plans; military, FERS, CSRS, state, county, municipal, union and private defined benefits plans and defined contribution plans; and survivor benefits.
Any account that you started or added to once you were married belongs to both parties. So, if you had an IRA prior to your marriage, the amount of funds added to the IRA since the marriage would be considered community property.
Retirement Funds Saved Prior to the Marriage
Some assets will be excluded from community property assets, especially if you were careful to have a prenuptial agreement drawn up.
Types of assets that can be excluded are accounts acquired before the marriage and inheritances.
If you had a 401(k) prior to getting married, then your prior savings and any increase in value of your deposits made prior to your wedding date will be considered as non-marital assets.
Navigating divorce can be trying but splitting retirement accounts can be especially difficult. Before discussing the issue with your soon-to-be ex-spouse, consult with a family law lawyer first.
Do you have questions about custody, guardianships, children's issues, or spousal support? If so, call me or schedule a consultation with the Law Offices of James V. Sansone at 707-623-1875 or contact me by email. You can find additional information on family law, children's issues, spousal support, domestic violence as well as a list of resources you'll find helpful on our website.