Retirement accounts come in two distinctive forms: Either a 401K, which has a dollar value, or a pension, which has a monthly return. Both of the aforementioned plans can be divided between parties and there are numerous ways to divide a retirement asset during a divorce.
As an example, the asset can be valued by its present day dollar value with half of that amount exchanged in lieu of the person modifying their retirement account. However, sometimes there are not enough assets to allow for an equalization, so possibly the matter could be divided by QDRO. A QDRO is a Qualified Domestic Relations Order, which as a practical matter, divides the pension account into two pension accounts– one for each party. Once an account is divided by QDRO, the party who is still employed at the offering employer would continue to make contributions, but only entered into their account. The other party who is not employed at the offering employer would still be bound by the rules of the employee, but no new contributions would be added to the account.
Our family law firm has been involved with retirement accounts from the military, police departments, teachers unions, union members, and numerous various individual retirement accounts. We have the experience and expertise to analyze the best means of division.