Your soon-to-be ex-spouse has the legal grounds to at least part of the 401(k) you have worked so hard to build. In most cases, you, your spouse and your attorneys will have to find a way to make a fair and equitable split of the funds.
Let’s say you graduated from college and landed your first job in 1998. You began contributing 7 percent of your paycheck into a 401(k) right away. You didn’t marry, however, until a decade later..
Your 401(k) is an asset. Virginia, like most states, is an equitable distribution state. That means the courts can divvy up the property and money of a divorcing couple based on a number of factors, including a spouse’s need or earning power. The courts have the authority to award an equitable distribution of marital property and debts. That includes your 401(k).
In Virginia, assets that are divided equitably are distributed depending on the circumstances of the case. In many divorces, that means an equitable split, but not always. You spouse likely will get at least some of your 401(k).
A person’s 401(k), pension or IRA can be the largest assets his or she has. But there is some good news. Virginia law looks at marital property and separate property. Like other forms of property, a 401(k) is limited to the growth and contributions the account saw during the marriage – from the wedding date until the date of separation. So in our example above, your spouse is not entitled to any of the 401(k) that you and your employer contributed to and grew over the 10 year period before you married.
A divorce attorney with experience in financial matters can help you understand your 401(k) administrator’s guidelines for dividing your account as part of the divorce settlement so there aren’t any mistakes or confusion.
Giving part of your 401(k) to the spouse you are divorcing can seem tough to accept, but remember: The retirement you earned before you married and your future retirement earnings are all yours.
The experienced family law attorneys at the DiPietro Family Law Group have decades of experience handling all types of family law matters and are here to help you.
Contact one of the DiPietro family law attorneys today to schedule a consultation with a caring professional at (888) 530-4374.