Must divorcing spouses in Connecticut divide retirement funds?

On Behalf of | May 1, 2024 | Property Division |

Some assets acquired during marriage are easy for people to address. One spouse may not have any interest in the fishing equipment or personal wardrobe of the other. Some assets, on the other hand, can become points of contention because of their value or their impact on someone’s future financial comfort.

Retirement accounts often represent years of diligence savings and may be the only source of income other than Social Security retirement benefits for adults who no longer work. Retirement accounts are both financially valuable and a source of comfort, as they represent future financial stability.

Is it always necessary to divide retirement accounts as part of a Connecticut divorce?

Accounts might be subject to division

Every property division decree is unique. In Connecticut, equitable distribution rules require that judges carefully review marital circumstances before deciding how to divide property. Spouses also potentially have the option of settling their own property division matters.

For example, a prenuptial agreement signed before the spouses married might indicate that they should each retain their retirement accounts in the event of a divorce. In such a scenario, neither spouse is likely to prevail when making a claim against the retirement savings of the other unless the agreement is invalid for some reason.

Contributions made to retirement accounts during marriage are usually part of the marital estate. In other words, the contributions made during the marriage are at risk of division. However, it is not necessary to actually divide the account to factor it into an equitable distribution of marital property.

People can calculate the marital value of retirement resources and then factor that into the division of other resources and even marital debts. If people must divide their retirement savings, there are ways to do so without further diminishing financial resources. A qualified domestic relations order (QDRO) can allow for the division of a retirement account without triggering taxes the year that the spouses divide the account or penalties that can further decrease the value of the account.

Divorcing spouses in Connecticut have many options available to them as they seek to negotiate property division settlements. Understanding how to approach high-value resources during property division can be beneficial for those preparing for Connecticut divorce proceedings. Those who consider every option can potentially secure the most favorable property division terms possible.


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