Spouses share just about everything. They live in and pay for the same house. They might each have separate credit cards attached to the same revolving line of credit. They often save for retirement together too.
Obviously, if you get divorced, you and your spouse will no longer share expenses or housing during your retirement. Your shared retirement accounts could be a priority for both of you in your upcoming divorce. Will you be able to split the account as part of your Massachusetts divorce proceedings?
Retirement accounts often contain marital assets
Massachusetts requires that a judge try to equitably divide a couple’s assets at the time of their divorce. This process can sometimes also include assigning benefits accrued by one spouse to the other.
The balance in your retirement account may represent marital assets. If you or your spouse contributed to that account during your marriage, those amounts are potentially subject to division. Even interest earned on deposits and employer matching contributions can get split up in your divorce proceedings.
The fact that the account is only in one spouse’s name will not matter. It is when they accrued those benefits or deposited money in the account that will matter. The longer you have remained married, the bigger the portion of the retirement accounts that is probably marital property.
How do you divide retirement savings in a divorce?
There are numerous ways to handle your retirement account in your upcoming divorce. If you and your spouse reach a settlement outside of court, you might decide that one spouse will keep the account but the other will receive other assets worth a similar amount. You can also decide to actually divide the account.
A judge might decide on a similar approach to one of those two options in a litigated divorce. They could also order alimony in lieu of splitting a retirement account or pension. Allocating other assets to reflect the value of the retirement account is a straightforward process. Dividing the retirement account will likely require special paperwork.