Considering Retirement Savings and Investments in Divorce

Considering Retirement Savings and Investments in Divorce

Among the financial affairs to be resolved during a divorce, the parties’ retirement savings and investments are extremely important and they often constitute a substantial part of the marital estate. Though perhaps to a somewhat lesser degree for younger couples divorcing than for older couples divorcing, because of the importance and value of retirement investments, they can become quite contentious. At the same time, for all parties divorcing, these accounts and funds can be easily misunderstood and/or mishandled. Accordingly, it is extremely important for both parties to be sure that all retirement savings and investments have been identified, properly valued, and that the due process and arrangement for their equitable distribution has been made.

Part of why retirement accounts may be misunderstood so commonly is that, unlike many other assets and accounts, retirement accounts are always held in the name of only one person; they are not and cannot be held in joint names. Then too, and as further discussed below, retirement accounts frequently do have both a marital component and a non-marital component to them. As such, it is not surprising for even quite sophisticated parties to refer to and/or to think about retirement accounts as being the property of one or the other of them, as opposed to thinking about these assets as marital property. Like other property acquired during the marriage though, the name or title in which retirement funds are held does not control how the account/asset may be distributed by a divorce court.

The distinction between the marital and non-marital components of retirement accounts follows from the timing of investments into the account and the appreciation of those investments. Many people (and/or their employers on their behalf) will begin investing in retirement accounts before getting married, and those pre-marital investments are non-marital. From the date of the marriage until the date the parties finally separate though, all investments into retirement savings are considered marital assets, as is the appreciation or increase in value of the funds invested prior to the date of marriage. Similarly, investments into a retirement account after the date of the parties’ final separation are non-marital and their value may be excluded from the court’s equitable distribution of the marital estate.

A final cautionary note is that there are specific requirements and a certain process due in order to be sure that retirement investments are actually distributed according to the agreement/award of the divorce court. Those requirements and that process can be complex and demanding. It is important to consult qualified and experienced counsel when considering this or any aspect of divorce, and the lawyers at the Law Office of Gregory LaMonaca look forward to discussing these considerations with you.

To schedule an appointment with one of our attorneys or for further information, call us at the LaMonaca Law, at (610) 892-3877

About the author

About Lawrence Welsh

Lawrence C. (Larry) Welsh joined the firm in 2003 after five years of practice with the Delaware County Public Defender’s Office. Native to Lansdowne in Delaware County where he attended public schools, Larry graduated from St. Joseph’s College (in its pre-University days) and taught school briefly before entering the hospitality industry and working his way through hotels, restaurants and resorts in four states and the District of Columbia. As a graduate of Villanova University School of Law, Larry now focuses primarily on the firm’s family law practice along with other areas of the Law. Larry handles a full range of domestic relations matters throughout the five-county southeastern Pennsylvania area and looks forward to expanding the firm’s practice, especially in the family-law field, into New Jersey where he is one of three members of the firm (along with Gregory P. LaMonaca and Christopher R. Mattox) admitted to practice.