Considering Retirement Savings and Investments in Divorce

Pearl shot with Gerry and Theresa

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

Support Spousal Support min

About the author

About Lawrence Welsh

A funny thing happened to Larry (Lawrence C. Welsh) on the way to his professional career in the practice of law. After graduating from college and before entering law school, he took an extended tour through the hospitality industry, working his way through both the service and business sides of hotels, restaurants and resorts in six states and the District of Columbia. Taking the business acumen and the ever-watchful attention to detail so well-honed during that experience into his lifelong passion to practice law has led Larry to his position as Chief Legal Counsel and head of the firm’s Forensic Support Team. Before joining the firm, Larry worked in the public defender’s office, through which he added an array of advocacy skills and trial experience to his resume. Since joining the firm in 2003, Larry has handled a full range of family law issues, which he continues to do, while lending experience and direction to others in the firm, particularly where and when the resources of the Forensic Support Team are most appropriate. Larry is also licensed in New Jersey, and he leads the firm’s New Jersey team operations. Larry is a multi-year “Top Lawyer” honoree in Main Line Today magazine, and he has been named as an “Awesome/Top Attorney” for family law and divorce in Suburban Life Magazine. Larry is an active member of the bar associations and family law sections of Delaware County, Chester County, and the state of Pennsylvania.