Divorce Retirement Account Division Considerations
As Portland Oregon based divorce lawyers, we get a lot of questions about the divisibility of retirement accounts. While division of retirement accounts during divorce isn’t rocket science, there are many considerations that go into dividing retirement benefits. I have had concern many times on seeing a potential client’s proposal for dividing an account that is unworkable, or outside of what the court would do. This post is to address some very general questions and considerations when dividing retirement benefits during a divorce case.
Retirement accounts are marital assets that should be considered in dividing property at divorce. Most types of retirement accounts are dividable by a court order. The following is our non-exclusive list of considerations when considering how to give the non-employee spouse an interest in a retirement account:
- Disentanglement: It is Oregon’s policy to disentangle divorcing parties. Some divisions of retirement accounts leave the parties entangled for the duration of the plan payout. Consider whether it is better to receive a lump sum in cash with no entanglement vs. a payout over time that leaves the parties entangled.
- Risk Sharing: Some plans are inherently more risky than others. Division should be done in a way that makes both parties equally bear the risk of future uncertainties, such as variable dates of retirement.
- Marital Portion: An equal division of a retirement account isn’t fair to the employed spouse if the retirement account existed for a period of time prior to the marriage. Generally, division should be based on the portion of the plan that accrued during the marriage.
If you have retirement benefits as part of your divorce case, at a minimum, you should consult with a lawyer about division considerations.