Among divorce attorneys, retirement and divorce is the new trending topic.
Here’s a scenario divorce attorneys see all the time. A soon to be former spouse panics because they’re husband or wife says they aren’t entitled to a penny from their pension, 401(k), or retirement savings.
The husband or wife tells their partner that the 401(k) is in their name, from their job, and that means it’s not a marital asset. The spouse then rightfully freaks out, as they see their entire retirement plan fly out the window.
If this situation sounds familiar, then there’s one silver lining to keep in mind. Your spouse is dead wrong. In fact, this is one of the most important pieces of divorce advice that divorce lawyers will ever give their clients. Retirement plans like 401(k)s and pensions are financial assets like any other, and that means they are absolutely fair game in a divorce.
Of course, that might not seem fair if you’re the one with the pension, but it’s still the truth. If you’ve spent decades living with your partner, then it’s only natural that you would have also shared a retirement plan. Even if that plan was tied to one spouse’s income or employee benefits, and even if it’s only in one spouse’s name, those marital assets are often divided up during the divorce process.
This happens all the time, like this Cincinnati husband who told his wife his 401(k) was legally protected from divorce decrees. His wife may have fallen for that whopper, but divorce attorneys won’t. Like splitting up any other major financial asset, it’s often a long, complicated, paperwork-heavy process to split up a pension or retirement plan, involving an entirely new set of divorce papers. Sometimes people are even more possessive of their hard-earned pensions than they are of their own children, as many child custody lawyers will sadly tell you.
Unfortunately for all mankind, this exact scenario plays out every day across the country. Typically, a first marriage that ends in divorce only lasts an average of eight years, long before retirement savings are a major problem. However, “grey divorce” has been on the rise lately. According to researchers at Bowling Green State University, divorce rates among people over the age of 50 have doubled in the last 20 years.
Too often in late-in-life divorces couples split up right on the verge of retirement, which makes their savings the most important asset they have. If you’re worried about retirement and divorce, then make sure it’s one of the first questions to ask your divorce lawyer at an initial consultation.