Divorce is one of the most challenging times in any person’s life. It often takes an enormous toll on the parties, and it is a difficult experience in every way, including financially.
In addition to the emotional difficulties the couple is going through, many other considerations further complicate the divorce process, including finances.
Retirement account savings
A couple’s retirement earnings during their marriage are community property in California and are usually subject to equal division, like a joint bank account or any other asset acquired during the marriage.
Marital assets are community property
Suppose one spouse’s name is on a retirement account. Even in that case, it is still considered marital property if the funds were acquired during the marriage. Any assets accrued when a couple is married belong to both spouses.
Equal division of assets
California courts divide marital assets equally, including retirement accounts. This means that any asset acquired during the marriage, whether acquired by the husband or the wife, is subject to equal division at the time of divorce. This does not include retirement funds obtained before the marriage or after the date of separation or divorce.
A spouse who acquired retirement funds before marriage or after separation can keep those funds. The funds will not be subject to division by the court because they are not community property.
When the time comes to divide retirement accounts, dates matter. The court will look at the assets, including the value of the accounts on the date of the marriage, separation, filing, and at the time of final settlement.
Divorce is difficult enough without considering finances. Unfortunately, finances, including retirement funds, are an important aspect of the divorce process and the parties must unsure they look at their finances closely to ensure the proper division of assets.