Retirement is often referred to as “financial suicide,” forcing you to divide marital assets, even if your spouse did not contribute equally to your finances. Many people are not told that their retirement funds are subject to division during divorce, including pension and 401(K)s. If you are getting a divorce, especially after age 50, this can have a large impact on your retirement savings. Other marital assets will be subject to allocation, with your spouse potentially receiving 50% of your retirement savings.
If you are in the process of getting a divorce, keep reading to learn more about the impact that it may have on your retirement savings and other marital assets, as explained by our Charleston divorce attorneys.
Marital versus Non-Marital Property
Any property that is acquired or purchased during a couple’s marriage is considered marital property. This will also include property that is obtained during your separation.
Marital property is subject to equitable distribution in South Carolina (more on that later).
Marital property in South Carolina may include:
- Single-family houses, condominiums, townhouses, and any other real estate
- Motor vehicles
- Jewelry and furniture
- Business interests
- Bank accounts, investment accounts, and retirement accounts
Non-marital property may include property that is:
- Acquired before the marriage (even if you were both living together at the time)
- An inheritance or gift
- Excluded in a pre-nuptial or post-nuptial agreement
- Any asset that can be traced back to one of these sources
Additionally, some assets can be both marital and non-marital property. This can be difficult to determine, so it is important that you speak with our Charleston divorce attorneys to ensure that your assets are being divided fairly.
Equitable Distribution in Charleston, SC
In South Carolina, the court will divide marital assets in the fairest way possible. This does not necessarily mean that property will be divided down the middle. Under SC Code §20-3-620, the following factors will be examined by the court in determining this distribution:
- The length of the marriage
- If either partner cheated or otherwise contributed to the breakdown of the marriage
- The value of the marital property
- Each spouse’s income
- Each spouse’s physical and emotional health
- The continuing education or training required for each spouse to reach their earning potential
- The existence of retirement benefits for either spouse
- If spousal maintenance or alimony has been awarded
- Tax consequences of equitable distribution to either spouse
- Child custody arrangements or obligations
- Any other factors the court deems relevant
How Can My Spouse Access My Retirement Accounts?
Your spouse may be able to access your retirement funds through a special court order known as a Qualified Domestic Relations Order (QDRO). In a judge signing off on a QDRO, the court may order that your retirement funds be used to pay alimony, child support, or marital property rights to a former spouse. A QDRO only applies to company retirement plans, such as 401(K)s and 403(b)s. It does not apply to SEPs and IRAs. However, an ex-spouse requesting access to these funds must follow the provisions of the Internal Revenue Code § 408(d)(6).
A judge will determine the distribution of your retirement savings based on what is most fair. Hence, your former spouse should not assume that he or she is automatically entitled to 50% of your retirement. The court will examine your entire financial picture to determine how retirement funds will be distributed.
Retirement account distribution can be complicated, but the Charleston divorce lawyers at Query Sautter & Uricchio, LLC are committed to helping clients protect their hard-earned money through the divorce process. By working with a divorce lawyer in beginning court proceedings, you afford yourself the greatest likelihood of asset protection.
Speak with a Charleston Divorce Lawyer Today
Many couples do not realize the financial implications of getting a divorce. Whether you are considering divorce or have recently filed for divorce, the Charleston divorce lawyers at Query Sautter & Uricchio, LLC, want to hear from you. To learn how our legal team can help you, contact us online or by phone to schedule your consultation.