Many couples plan for a joint retirement. They may have savings that they put aside together or other financial assets. In many cases, one person will be part of a retirement plan through their employment, and their spouse will be expecting to use that retirement plan as well.
Perhaps you are in this position, where your spouse has been earning a retirement plan for years or even decades. Now you are getting closer to retirement age, but your spouse has asked you for a divorce. This is going to change your life in many ways, but is it going to make it impossible for you to retire?
You can use a QDRO
In many cases, you can still get a percentage of that retirement plan. You just need to use a qualified domestic relations order (QDRO). During property division, the court will determine what percentage of the plan’s future payments should go to you and what percentage should go to your spouse as the earner of that plan. Once they retire, the payments will be divided up accordingly.
Exactly how this is done is unique from case to case. In many cases, the court will look at the length of the marriage and divide only the portion of the plan that was earned during that time. In other words, if your spouse earned part of their retirement benefits before or after your marriage, some of that plan may count as a separate asset, while the portion earned during your marriage counts as a marital asset.
As you can see, this can become very complex, so it is important to know what legal steps to take at this critical time.