The process of getting divorced can naturally be challenging for all parties from a financial standpoint. Specifically, divorcing individuals who have been planning for retirement may wonder what will happen to their savings as part of the divorce process. Here is a rundown on how retirement savings are handled during divorce in New York.
First, it is important for two divorcing parties to consider what they did before getting married. If the two parties created a prenuptial agreement, this agreement will dictate what happens to their retirement savings. Meanwhile, if the two parties did not create this type of agreement, and if one person has a 401(k), both individuals are entitled to portions of that person’s 401(k).
Also, any income that individuals added to their retirement accounts or to their spouses’ accounts while married is generally deemed marital property. Thus, it is subject to division. This income includes any funds that a person or his or her employer added to his or her retirement account. How exactly this income is divided will be determined by a family law judge, who may look at each spouse’s financial contribution to the marriage before reaching a decision. In the end, retirement funds may not be split down the middle, particularly if one of the spouses earned more during the marriage.
Trying to figure out how property distribution is handled during divorce can no doubt be overwhelming. However, an attorney in New York can provide the guidance needed to navigate this process with confidence. The attorney will help the divorcing party to pursue the most personally favorable asset division outcome possible, given the circumstances surrounding the divorce.