Everybody knows a divorce means a division of property, but some assets are much harder to divide than others. That often includes retirement accounts.
Under Maine law, most retirement accounts – whether it be a pension, IRA, 401(k) or another plan – are considered marital property, meaning they are eligible to be split during divorce proceedings. So what, exactly, might happen to that prized retirement account? It depends.
An equitable – not equal – distribution
It’s important to understand that Maine courts look to divide property equitably. This means the split will be fair, not necessary done equally down the middle. In determining what’s fair, the courts will consider:
- What each spouse contributed, including as a homemaker
- The value of property set apart to each spouse
- The economic situation of each spouse at the time of the divorce
- Any other relevant factor
This only applies to marital assets, not anything considered non-marital property. Such non-marital property includes most things acquired before the marriage, anything inherited or received as a gift during the marriage, or anything acquired after a decree of judicial separation.
In most cases, a retirement plan is marital property.
How a retirement plan will be divided
As is the case with any Maine divorce, a separating couple can determine how to divide a retirement plan themselves, either before or during the course of mediation. If they can not reach an agreement, a judge will divide the assets for them, with the goal of making the division equitable.
What exactly happens to a retirement account can vary, with some plans requiring extra attention. But in general, it’s possible for:
- Both spouses to keep their own retirement plans untouched
- One spouse to receive a share of the other’s retirement account
- A spouse to receive other marital assets of value in exchange for not taking any of the retirement plan
Many aspects of dividing a retirement account can be quite complex. Even determining an account’s value can be difficult, especially in the case of a defined benefits plan. Because of this, many divorcing couples choose to hire an attorney to help understand not only what is possible, but what is fair.