Quatela Chimeri, PLLC

3 things to consider when dividing a retirement account

Divorce is rarely a simple process. Even if you have a prenuptial agreement, there are negotiations and details that you will have to parse through with your ex. One issue that some former couples run into is the division of retirement accounts. If you and your partner had been jointly contributing to a retirement account, dividing this asset can be a tricky situation. Luckily, there are steps you can take to simplify the process and ensure that both parties retain the value they are owed.

If there is a dispute regarding the division of a retirement account or any other asset in a divorce, it may be in your best interest to seek out legal counsel.

QDRO agreements

According to the New York State Comptroller, asset division in a divorce may use a qualified domestic relations order — or QDRO. As it relates to a retirement account, the original owner of the account still retains all rights, but a QDRO can split its value and grant partial rights to an ex-spouse. This is often an ideal way to ensure your contributions to the account are not lost in a divorce. 

Court orders

In the event that a spouse in control of a retirement account will not relinquish rights or share its value, a court order may be necessary. For spouses who make joint contributions, even if only one spouse owns the account, both should receive their rightful portion of its funds. In such circumstances, obtaining a court order may be the best option available. 

Equitable distribution

Equitable distribution is the most common way for assets to be split in a divorce, but it is not always the best way when it involves a retirement account. The term refers to division of the entirety of a marital estate, so rather than split the value of a retirement account, equitable division may allow the owner to retain the account while granting the other spouse a settlement to make the division equal.


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