Wisconsin is one of a handful of states that treats retirement accounts as community property, and they’re typically divided equally between the couple during divorce. The three main types of retirement assets – IRAs, 401(k)s and 403(b)s – all get divvied up based on the community property principle unless certain exceptions apply.
When is a Retirement Account Community Property?
If the parties were married during the entire time that one or the other contributed to a retirement account, the account is considered community property. As community property, both parties are entitled to an equal share.
However, if one party contributed to a retirement account before the couple was married, the account can be treated as separate property. In a case like that, the retirement account isn’t subject to division between the two parties.
Pension Plans and Property Division
A pension plan, which is something some employers offer without requiring an employee to contribute, requires valuation during divorce. In many cases, the parties to a divorce that includes a pension plan need to hire a professional actuary. The actuary will figure out the value of monthly pension payments, how much of the pension should be considered a marital asset, and how much the nonemployee spouse is entitled to receive.
If you must divide a pension, you have a couple of options. One spouse can “buy out” the other, which means giving up some other assets to make up for the value of the pension, or the couple can decide to split the pension when the employee spouse retires. It’s a little more complex to divide it at retirement, and it requires couples to get a qualified domestic relations order, or QDRO, so many people choose the buy out option.
What if You Have a Retirement Account to Divide During Your Divorce?
If your divorce involves possible complexities like retirement accounts, you need to work with an experienced Milwaukee divorce attorney who can help.
Call us right away at 414-383-6700 for a free divorce consultation. We’ll answer your questions, refer you to the appropriate professionals, and represent your best interests every step of the way during your divorce.