Like most states, North Carolina uses the equitable distribution model of property division in divorce. This means that all assets considered to be marital property should be divided equitably (but not necessarily equally). One of the most valuable assets in any divorce is, ironically, often overlooked: retirement funds.
If you and your spouse are both employed, you may each have separate accounts/pensions. If only one spouse works outside the home, there may be just one account – or there may be a different arrangement altogether. The important thing to know is that retirement assets acquired during the marriage (by either spouse) are typically considered marital property and may subject to division in divorce, regardless of which spouse’s name is attached to the account.
This goes for all types of retirement assets, including:
- Military pensions
- Profit-sharing plans
- 401(k) plans
How are accounts divided?
For the sake of demonstration, consider a pension plan. If your spouse has a pension, you might be entitled to up to 50 percent of that pension, depending on length of time you were married during employment and the total length of employment.
The legal tool you need to divide retirement assets
Simply filing for divorce will not result trigger a division of retirement assets. For that, your attorney will need to help you file a qualified domestic relations order (QDRO) with the court. Without this order, the administrator of one spouse’s retirement plan will not pay any portion of that plan to the other spouse.
A QDRO is an important and sometimes-complex legal tool and needs to be entrusted to an experienced attorney.
Filing for divorce later in life
So-called “gray divorce” (wherein both spouses are 50 or older) has become very common in the United States. The biggest risk with a gray divorce is that spouses will lose some of their retirement savings (because it costs more to retire as two single people than as a couple) and won’t have as much time to make up the difference.
For this reason and numerous others, it is critical that you work with a skilled attorney if getting divorced later in life. Retirement assets will likely need to be top priority to ensure that your future remains financially secure.
Discuss your options with a family law attorney
You don’t need to sacrifice your future when you get a divorce. To learn more about your legal options when it comes to dividing retirement assets, please reach out to an experienced attorney in your area.