Retirement funds and pensions hold a significant percentage of many couples’ wealth. If a marriage ends, dividing these assets fairly is critical, especially if the couple is nearing retirement age. Contact Dolan Divorce Lawyers about dividing pension and retirement benefits in a Stamford divorce. Our high-asset attorneys will work to ensure you receive a fair portion of these assets or that your ex-partner does not walk away with more than their fair share of your hard-earned retirement funds.
Connecticut General Statutes § 46b-81 governs property division in divorce. It requires that marital property be divided equitably between the spouses. There is no requirement that the division be equal, only that it be fair under the specific circumstances of your marriage.
A unique aspect of Connecticut property division law is that both spouses have an interest in everything either spouse owns at the time they separate. Even if one spouse contributed to a retirement or pension plan for years before they married, the other spouse has a legal interest in the full value of the assets when the marriage ends.
This does not mean both spouses automatically get half the value of each other’s pension and retirement assets. In practice, a judge can separate a spouse’s retirement savings contributions before marriage if doing so produces a more equitable result. A Stamford property division attorney can explain the factors a judge considers when dividing retirement benefits.
Since the law does not require that retirement assets be divided between the parties and only that each spouse receive a fair share of their value, it sometimes makes sense to keep the pension and retirement funds intact. In that case, you and your spouse can agree to substitute assets of a similar value instead of withdrawing funds from a pension or retirement account.
The federal Employee Retirement Income Security Act (ERISA) governs employer-sponsored pensions and 401k benefits. The law forbids paying assets from these accounts to anyone other than the owner while the owner is alive.
When spouses divorce and must divide funds in ERISA plans, the court must issue a Qualified Domestic Relations Order (QDRO). This order instructs the administrator of the plan to divide the assets and pay a portion to the non-owner spouse. Our Stamford attorneys can negotiate a fair division of any ERISA plan and ensure the court issues a properly drafted QDRO to facilitate the division.
ERISA does not apply to state retirement plans like the Connecticut Municipal Employees Retirement System (CMERS). If you or your spouse are entitled to CMERS benefits, you must obtain a Plan-Approved Domestic Relations Order (PADRO). Like a QDRO, a PADRO is a court order directing the plan administrator how to divide an owner’s funds.
Many people with employer-sponsored retirement benefits use the tax benefits of IRAs to accrue additional retirement savings. Self-employed people also use these vehicles to save for retirement. Like pensions and 401k plans, the value of these funds is part of the marital estate and subject to division when a couple divorces.
Our Stamford attorneys will manage the division of these retirement accounts to preserve the tax advantages for both parties. In most cases, this will entail rolling the divided funds over into the receiving spouse’s IRA.
The retirement plans you and your spouse own may hold a high portion of your total wealth, especially if you are nearing retirement age. Ensuring you receive a fair portion when your marriage ends is critical. Turn to an attorney at Dolan Divorce Lawyers for help dividing pension and retirement benefits in a Stamford divorce. Contact us today to discuss your property division issues.
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