Division of Retirement Accounts in SC Divorces

Division of Retirement Accounts in SC Divorces

A party may be entitled to a portion of their spouse’s retirement account(s) in an equitable division of property from a divorce. In this blog, I have provided a few pieces information that I have found most relevant in regards to this issue.

How are rights to a spouse’s retirement account earned?

Rights are accrued from the date of marriage until the date of legal separation. On the date of filing a “snapshot” is taken of the account’s value. Generally, this is the amount that is subject to equitable distribution. This is why it is important to speak to an attorney even if you are waiting for the one year anniversary to file a no-fault ground for divorce. It might be prudent to file and prevent your spouse from any further accrual of benefits. Of course, any assets accrued before marriage or after the date of legal separation are the subject of much litigation and should also be specifically discussed with an attorney.

How is the retirement account divided?

How it is divided depends on the type of account. 401Ks and private pension plans are generally divided by a QDRO (Qualified Domestic Relations Order).  QDRO’s splits or changes ownership of the retirement account to give the divorced spouse a share.  Some chose to cash it out or roll it over to another retirement account. There are tax implications in both choices so it is important to discuss each option with your lawyer.

Civil service benefits like FERS (Federal Employees Retirement System) or CSRS (Civil Service Retirement Act) are divided according to Federal Law and the orders dividing them must follow certain requirements. The U.S. Office of Personnel Management runs a very informative website if you wish to read more information civil service retirement benefits.

What if you both have retirement accounts?

Often times, both parties have retirement accounts. Some division may be needed as the factors regarding equitable division require (example:  one account is significantly more than the other), but generally the parties agree that each party would retain their respective retirement accounts in full.

Please remember that each case is unique. If you have any questions about this blog “Division of Retirement Accounts in SC Divorces,” Divorce, Equitable Distribution, Retirement Accounts, or Family Law in general, we urge you to contact us. In order to be flexible and convenient, we have open office hours, easy appointment scheduling, and payment plans available. Call today and schedule your free confidential consultation.

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