Division of Retirement Benefits Upon Divorce
Generally, couples who divorce in Utah are entitled to an equitable division of retirement investments acquired during the marriage. Equitable means fair, which isn’t necessarily equal. This applies to both parties, regardless of who created the retirement investments from the marriage date to the date of the divorce. Retirement benefits are grouped as “property” and are thus subject to division in the event of a divorce. The court can split all marital property, regardless of which spouse holds title to the property or where it is located. If the couple each has retirement or pension plan benefits, typically the court will allow each spouse their own benefits. However, courts will handle the division of every divorcing couple’s assets differently in every divorce case.
Defined Contribution Plans
Defined contribution plans are retirement plans based on funds available in an individual’s account. Generally, a person makes contributions to a retirement fund, and according to their employer, they may match the donation or distribute a certain separate percentage. The return of their investment will determine the final size of their fund. Plans such as these are more manageable than a defined benefit plan, as employees have the option to roll over their contribution funds into a new employer’s retirement plan or their own. Some examples of defined contribution plans include the following:
- IRAs (“Individual Retirement Accounts”); SEP-IRAs; Educational IRAs; Roth IRAs
- Profit-sharing plans
- Stock savings plans
- Deferred compensations plans
Retirement Plans Not included in Marital Property
Not all retirement benefits and pensions may be considered marital property susceptible to division at the time of divorce. Some retirement plans are regulated by federal law, so states are thereby omitted from using their marital property laws to those assets. Some examples of retirement benefits that aren’t included as disbursal marital property include:
- Railroad workers retirement benefits
- Military injury compensation
- Workers’ compensation disability awards
- Social Security payments
Speak with a Legal Professional
Our retirement is usually one of the items we count upon most as we age. We all work hard for these benefits and savings, to provide security once we are no longer able to work. Contact our office today if you are seeking a divorce and are concerned about retirement benefits. Our attorneys are here to help you seek a fair division of assets during your divorce.
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