Divorce and your retirement assets

When you’re in the midst of a divorce, you have to juggle so many things.   You need to add to this all the practical issues — and there are many.

Let’s start with the fact that retirement benefits are not automatically split during a divorce. Just like other marital assets, a divorce court judge or an agreement between you and your spouse divides the benefits. Find out as much as you can about the benefits earned by you and your spouse during the marriage. Then make sure you and your lawyer protect your right to those benefits.

1     Retirement benefits come from a variety of employer-provided plans — pension plans, 401(k) plans, deferred compensation plans, and 403(b) plans, among others

2     Note that your spouse may have 401(k) assets sitting in an Individual Retirement Account (IRA), if he/she changed jobs during your marriage. Make sure you consider all former employers, because any type of employer can sponsor retirement benefits.

The divorce law in just about every state considers retirement benefits earned by either husband or wife during the marriage as “marital property” (or “community property” if you live in a community property state).

 What benefits are divisible? All retirement benefits earned during the marriage may be divisible depending on state law.  These include defined benefit plans and defined contribution plans, such as 401(k) and 403(b) plans. States differ in what types of  benefits they consider marital property.    

Be clear on this critical point:  have all the information about your spouse’s retirement benefits before you divorce. It is nearly impossible to go back to court and ask for a share of your ex-spouse’s benefit that you learn about after the fact. The agreement will eventually become part of your divorce decree.    

 Think carefully before waiving your right to pension benefits in exchange for your spouse’s share of the house. This is a common arrangement but not always the best choice. While owning the house may seem like the best option, you may find after just a few years that you cannot afford the mortgage, taxes or upkeep. Or you could decide to sell the house a few years later and incur a hefty capital gains tax. Keep in mind that the pension benefits you walk away from could come back to haunt you when you reach retirement age.

 Get a “Qualified Domestic Relations Order” (QRDO) If you plan to ask for a share of your spouse’s retirement benefits, you need a qualified domestic relations order or QDRO.  (Orders for retirement plans of government  employees may have different names.) The QDRO is a court order that is usually written by one of the couple’s attorneys. It orders the retirement plan to pay you a specified share of the benefits based on the terms of your divorce agreement. Your lawyer will submit the QDRO to the court for a judge’s signature. After the judge signs the QDRO, send it to the plan administrator as soon as possible. Your agreement should specify whether you or your spouse is responsible for preparing the QDRO and paying the related fees.

 What happens if you don’t get a QDRO? You could end up like thousands of men and women who reach retirement age only to find out that they won’t get what the divorce decree stated because the documentation wasn’t handled properly.


  • How will your share be paid? You may receive it as a single lump sum, a monthly pension, or in some other form.
  • What happens to your share if your spouse dies before you are paid
  • What if you die first?  
  • Does the plan have cost-of-living increases?  
  • Will you receive interest on your share if there is a delay in your payment?  
  • Does your spouse have a loan from the plan?  

 Your QDRO Checklist

  • You must get a QDRO for retirement benefits.
  • Have your lawyer ask the plan administrator ahead of time if the plan charges a QDRO processing fee or has a model.
  • Direct your lawyer to ask your spouse to pay part of your legal fees and any QDRO processing fees.
  • Submit it to the court for a judge’s signature.
  • Send the QDRO immediately to the retirement plan for approval*

I specialize in securing the future of women and their families.

Pat Frederiksen – Licensed Professional Agent

Author of “Single Today”

Author of the “Ten Critical Financial Issues Facing Women During Divorce-call for free copy



Five Rings Financial 10268 W. Centennial Rd.  Ste 302 Littleton, CO  80127


*Based on Wi$eUp, a financial education program developed by The Texas A&M University System under a contract from the US Department of Labor Women’s Bureau


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