By Jennifer M. Paine
My previous divorce article ("Should I Stop Contributing To My Retirement Account Before Divorce?") addressed the pros and cons of contributing to your retirement account if a divorce is looming.
The divorce court may, and often does, assume that you are upping the contributions to avoid a support obligation and will treat you as if you still have the dollars in your pocket.
This means, you will be required to pay support at a presumably higher level, even though you do not have the dollars actually available as net income.
You may find yourself dipping into retirement - and paying taxes and penalties to boot - just to pay the support you could have paid had you not decided to contribute more.
Two Dollars In, One Dollar Out
In most states, each spouse's retirement account is divided for the marital portion, generally meaning the value that accrued between the date of marriage and the date of divorce. The portion may be equal, or more or less, depending on your state's laws and the factors in your case.
As you begin thinking through the divorce process, you should start with the assumption that every two dollars you put in will result in one dollar going to your wife.
Talk to an attorney about each spouse's rights to a share of the account, as well as the manner and method of division, i.e., Will she get cash? Does she have to wait until I retire?
But keep in mind that, even if the account is divided equally, you still have funds for yourself, too.
Meet With A Divorce Attorney Today:Cordell & Cordell Lawyers
Jennifer M. Paine is a Michigan Divorce Lawyer with Cordell & Cordell. She is licensed to practice in Michigan, and has been admitted pro hac vice in Illinois, Ohio, and the United States Court of Federal Claims.
Ms. Paine received her BA in English and Mathematics from Albion College and graduated Summa Cum Laude. She received her Juris Doctorate from MSU College of Law and graduated Summa Cum Laude.