When people think about dividing property in a divorce, they often focus on the house, cars, or bank accounts. But one of the most valuable (and often overlooked) assets is retirement accounts things like 401(k)s, pensions, IRAs, and other long-term savings. One of the reasons they are overlooked is because of a common belief that retirements belong to the spouse who “earned” the retirement. In California, retirement accounts earned or contributed to during the marriage are usually considered community property, meaning they’re divided equally between the spouses. But how that division happens can be more complicated than you might think.
First, it’s important to understand that even if an account is in just one spouse’s name, that doesn’t make it separate property. If contributions were made during the marriage, at least part of the account is likely considered community property. That said, any portion earned before the marriage or after separation is generally separate property and belongs only to that spouse. Figuring out which part is community and which part is separate often requires detailed financial records and sometimes the help of a financial expert.
Dividing retirement accounts isn’t as simple as writing a check or transferring money between accounts. Many plans require something called a Qualified Domestic Relations Order (QDRO). This is a special court order that tells the plan administrator how to split the account without triggering taxes or early withdrawal penalties. Without a QDRO, you risk paying unnecessary taxes or fees. This is why it’s so important to work with an attorney who understands the process and can make sure your retirement assets are divided fairly and correctly.
If you’re going through a divorce and want to protect your retirement savings, The Grey Legal Group, APC is here to help. Our experienced family law team can guide you through the division process, explain what’s fair under California law, and help secure your financial future. Contact us today to schedule a consultation and take the next step toward peace of mind.