For many people, retirement accounts and divorce settlements are confusing. Will your ex-spouse get your retirement? Will your divorce settlement require you to give over half what you planned to retire on?

Here’s what you need to know.

Retirement and Divorce Settlements

If you or your spouse has money tied up in a retirement plan, you’ll need to account for it in your divorce settlement. The type of retirement plan (or plans) that you have will determine how you’re supposed to split this asset.

You can be years away from retirement and still have to split some of what’s in your retirement account in your divorce settlement. In California, the law allows for two types of property: separate and community.

Retirement, Divorce Settlements and Separate Property

Separate property is property that belongs only to you or only to your spouse. If you have separate property, you take it with you in the divorce.

Contributions you made to a retirement account before you were married generally count as separate property. If you put money into your retirement account for, say, 10 years before you married your spouse, the contributions you made during that decade are yours and yours alone.

Retirement, Divorce Settlements and Community Property

Community property is any property you and your spouse acquire during your marriage. The courts divide your community property (or you and your spouse reach a fair agreement on your own community property) when you divorce.

Contributions you made to a retirement account during the time that you were married count as community property. The court can divide this part of your retirement account between you and your ex-spouse.

If you contributed some money to a retirement account before your marriage and some money after your marriage, you have both separate and community property. Only the money you put in and benefits you earned during your marriage count as community property, but it can be a little bit complicated to sort through it all so you can follow the law.

Related: Contested vs. uncontested divorce in California

Should You Hire a Pension Expert?

For some people, the best solution is to hire someone who understands how retirement accounts and divorce settlements work in California. The person you hire can work out all the math and help ensure you’re following the law.

However, you don’t have to hire a pension expert. You and your spouse are free to reach an agreement on how to divide your retirement account – and that might even include doing something like waiving your rights to each other’s pensions.

What is a QDRO?

A QDRO is a qualified domestic relations order. The QDRO is a court order that explains the details on splitting up certain types of pensions. It grants one spouse certain rights to the other spouse’s pensions.

What Should a QDRO Include?

A QDRO must include, at minimum:

• The name and last known mailing address of the participant and alternate payee (the person receiving the benefit through the divorce settlement)
• The name of each plan that the order applies to
• The dollar amount or percentage – or, alternatively, the method of determining the amount or percentage – of the benefit that must be paid to the alternate payee
• The number of payments or the time period to which the order applies

Some plans require additional information, as well. This is just the bare minimum.

If you’re filing for separate retirement plans, such as if you had two jobs with pensions that cover some portion of the time you were married, you must file a separate QDRO for each.

Your attorney – and your pension expert, if you choose to hire one – will explain what you need in your situation.

Do You Need to Talk to a Lawyer About Retirement and Your Divorce Settlement?

If you’re divorcing and you or your spouse has a retirement plan, your divorce settlement needs to reflect it. We may be able to help you, so call us at 209-546-6870 to schedule your consultation with a Stockton divorce attorney now. We’ll also answer your questions about child custody, child support, spousal support and property division.