If you and your spouse have enjoyed a comfortable standard of living throughout your marriage, then you probably have significant personal property to split up when you divorce. Retirement accounts and pensions are often a focal point of negotiations after a divorce. These accounts may represent hundreds of thousands of dollars. Many people considering divorce in Minnesota don’t really understand how property division works under state law.
For example, a spouse who has served as a homemaker for two decades might assume that they have no claim to the retirement account held by the bread-winning spouse. On the other hand, is someone who supported a lower-earning spouse might assume that their pension is solely theirs because they started their job before they got married and only have their name on the account.
How do the Minnesota family courts approach retirement assets in divorce proceedings?
Retirement accounts, like other marital property, are subject to division
If you can’t settle your property division issues outside of court, then a judge will be the one who reviews an inventory of your assets and decides how to split everything. During that process, they have to use the state equitable distribution law as a guide.
The judge will try to set terms that are fair given the details of your marriage and your current personal situation. All of the property and debts from during your marriage are vulnerable in Minnesota divorce. Some assets are separate, including retirement or pension contributions made before the marriage. However, whatever amount someone accrued while married, including bonuses and employer-matching contributions, are likely marital property that the courts can divide.
The courts can divide the account or consider its value
There are typically two distinct approaches to a big asset like a retirement account. The courts may decide to divide it. In that case, the spouses would draft a Qualified Domestic Relations Order to submit to split the one account into two without incurring any penalties. Otherwise, the courts can consider the value of the retirement account when determining who retains other property, like the marital home.
Understanding that both spouses may have a claim to the retirement account can help you navigate the property division process in your divorce.