Spousal Interests In Retirement Plans

Spouse's Entitlement To Employee's Retirement Plan

A nonmember spouse has an interest in the community portion of an employee's retirement plan. It is an interest that needs to be identified and protected early in the divorce process.

Retirement plans are usually a couple's second largest asset, after their home. Dividing these plans can be complicated. Typical plans include PERS (Public Employees Retirement System) or a company 401(k) plan. Older plans may have a defined benefit component. The way a plan is divided depends on whether the member is currently retired, the makeup of the plan itself and whether any portion of the benefits is received because of the member's disability.

Retirement Plan Guidance In Rancho Cordova

The nonmember spouse has two ways of obtaining his or her interest in the retirement plan: division or buyout. A buyout involves determining the present value of the nonmember spouse's interest and the member spouse paying that amount in cash at settlement. It raises important life-planning and tax questions.

Division of a plan is accomplished by a court order called a qualified domestic relations order (QDRO). These are standardized agreements between the parties and the plan on how the benefits to the nonmember spouse will be paid.

If you have any questions, you may contact our Sacramento spousal support attorneys through this website or call us at 916-229-6847 and we will discuss your legal matters.

This does not constitute a guarantee, warranty or prediction regarding the outcome of your legal matter.