All marital assets are subject to property division during the divorce process. Marital assets are those which are acquired by a couple during the marriage. If one party had the retirement account before the marriage, it is considered a separate asset. If the retirement account was started after the marriage, it is considered marital property and therefore, subject to division.
Any retirement funds that had accumulated before the marriage are considered separate property. The party that started the retirement account can keep the separate funds, as well as any interest that had accrued on them. However, if the retirement fund kept accumulating money and interest after the marriage, this portion of the account is considered marital.
For example, a spouse may have $10,000 in a retirement account before they get married. The spouse was then married for ten years, during which time the retirement account grew to $25,000. In this case, $15,000 of the funds, as well as any interest accrued, is considered marital property and will be divided during the divorce.
There are times when a retirement fund is considered marital, even when funds were acquired separately. For example, if the party that originally held the account put their spouse’s name on it, there is a strong argument that the entire account is considered marital property.
How are Retirement Accounts Valued in Divorce?
If all of the retirement funds are considered marital, the value of the account at the time of divorce filing is used to value the fund. Interest will also be taken into account and any contributions made after the filing date are deducted from the value. If only a portion of the retirement account is considered marital property, the value of the funds at the time of marriage, and at the time of filing must be determined. Usually, a financial expert is called in to value these assets.
How are Retirement Accounts Divided?
South Carolina is not a community property state. Due to this, marital property is not automatically divided 50/50. The family courts will strive to divide marital property equally between the two spouses. There are times, though, when they will deviate from this. If your marriage was very short, or there was marital fault, such as domestic violence, a judge may decide to award more of the retirement account to one spouse rather than the other.
In some instances, the court may not divide a retirement account at all. For example, if the retirement funds are worth $100,000 and the marital home is worth the same amount, a judge may award the account to one party and the house to the other.
Our Divorce Lawyers in Charleston Will Protect what is Yours
If you are getting a divorce, our Charleston divorce lawyers at The Peck Law Firm will help you outline your goals so you can keep what is most important to you. Call us now at (843) 631-7117 or contact us online to schedule a consultation.