Just like other marital property, retirement accounts such as 401(k) and Individual Retirement Accounts (IRAs) are up for equitable division in Virginia divorces. While dividing the assets in a bank account is relatively straightforward, dividing retirement accounts is more complex, especially if there are penalties for dipping into an account before a certain number of years. Furthermore, there are specific rules regarding the division of certain retirement accounts if the couple has been married for a certain number of years. The retirement accounts and divorce attorneys at the Virginia Family Law Center are available to help if you are going through divorce.
Virginia is an equitable division state, which means that all marital property is divided fairly, though not necessarily evenly. If a couple cannot come to an agreement between themselves, a court will intervene and divide those assets based on a wide array of factors, such as the length of marriage, contributions that each spouse made to the marriage, the age and health of each spouse, and much more. The goal of the court, in this case, is simply to “arrive at a fair and equitable monetary award.”
All assets acquired during the marriage are subject to equitable division under Virginia § 20-107.3.
When dividing 401(k), 403(k), and IRAs in which the spouse and their employee have made contributions over the years, the following will be taken into account: If an employee made contributions to the retirement account for at least 25 years and the marriage lasted at least 20 years, all contributions the employed spouse made before the marriage are exempt from distribution. For example, if the spouse contributed to the account for 25 years, those first five years would be exempt. Furthermore, the non-employed spouse cannot receive more than 50% of the fair market value of those retirement assets.
Around 31% of Americans retire with a pension, according to Personal Capital. During Virginia divorces, pensions are divided as follows:
Division of pensions, IRAs, 401(k) accounts, and other retirement assets is a complex process that must be handled by an experienced retirement accounts and divorce attorney. We urge you to call the Virginia Family Law Center today at 703-865-5839 to schedule a free consultation.
At Virginia Family Law Center, we protect clients’ rights and help them understand the legal processes they are working through. Schedule your 30-minute telephone consultation with an experienced lawyer by filling out the form below.