After years of marriage, going through a divorce can be frustrating and confusing. When it is time to divide the assets between you and your ex, it may be unclear what you will split and what belongs to one or the other.
You and your partner may have worked together on your retirement plans during your marriage. Now that it is time to figure out what to do with your retirement account, you may feel there are more questions than answers.
Here’s what you should know about how divorcing couples handle their retirement accounts through a divorce.
Retirement plans can be tricky to split
With other assets, courts will usually look at when one person received it or if one spouse purchased it exclusively to determine what is (and is not) marital property.
Typically, the intent when you start a retirement plan is that you and your spouse will share the money when one or both of you retire. You may contribute to the plan directly from your salary, or you may contribute combined funds to an account that is not affiliated with an employer.
Retirement accounts also have specific rules and tax issues to consider since some types of accounts allow you to delay paying taxes on the income until it is time to start drawing funds from the account.
In West Virginia, there are rules regarding division of retirement accounts and changing beneficiaries during a divorce. Under certain circumstances, you can make changes to your retirement plan without incurring some of the penalties that typically come with making changes.
In most cases, retirement accounts are considered marital property. However, there are exceptions if a retirement account is part of a prenuptial agreement or another legal arrangement.
When it comes time to divide a retirement account in West Virginia, courts will follow equitable distribution, which means that the account will be divided equitably, but that may not mean you both get equal amounts.
Your retirement account is an important investment in your future. You should talk to a skilled professional about how your divorce will impact your retirement.