How Can I Protect My 401k or Retirement in Divorce?
Protecting your retirement is obviously one of the most important things you do in the divorce process. There’s two fundamental questions you have to keep in mind in respect to protecting your retirement.
The first question is what kind of retirement is it? Is it a defined contribution plan? Which means you contribute a certain sum of money on a monthly basis or annual basis. Or is it a defined benefit plan? Which means you get a certain sum of money depending on how long you worked for your employer or how much you earn when you actually retire.
If you have a defined benefit plan such as a Boeing pension or a police officer’s pension then you’re probably going to have to get then pension evaluated by a certified public account.
Another thing to keep in mind is whether your retirement is separate property or community property. This can become really important in long term and short term marriages. If it’s a significantly short term marriage – like less than 5 years – chances are there’s not much, if any, community interest in your retirement plan.
On the other hand, if you spent a lifetime with your spouse – more likely than not – most if not all of that retirement is going to be considered community property. Which means it will be distributed once your divorce is finalized. Why am I telling you this?
Because good divorce planning and knowing what happens to your retirement is one of the most fundamentally important things you’re going to do in your divorce. Our firm deals with retirement plans and 401k plans and pensions on a daily basis.
Give us a call at: 206-633-2015. We can help you!
