Retirement Accounts

The law presumes that all assets obtained during a marriage are community property, including retirement accounts.

Retirement accounts can sometimes have mixed characterization of separate and community property if you started contributing to your retirement or pension before getting married. Tracing of accounts between separate and community can be complex or simple.

401k and IRA Accounts (Defined Contribution Plans)

For instance, with 401ks and IRAs, if you started contributing to a retirement account before marriage, then the contributions pre-marriage are your separate property. You must get the account statements to show the balance at or as close to the date of marriage as possible to prove your separate property portion. You should also save all statements you receive during the course of your marriage in the event more complex tracing is required during a divorce. The simple (shoe-string method) of tracing is to show the account balance as close to the date of marriage as possible, the current balance, and subtract the difference to obtain the community portion. Depending on the amount at issue, you may need to hire a tracing expert to go through each investment to trace the separate and community portions.

Pension Plans (Defined Benefit Plans)

The community and separate property portions of pension plans are calculated using a formula that considers the date of hire, the date of marriage, and the date of divorce. It is a much more straightforward method of tracing.

Qualified Domestic Relations Order (QDRO)

A QDRO is required to divide retirement accounts. It is a separate court order from the divorce decree. The QDRO lets the plan administrator withdraw your portion of the retirement account into a separately created retirement account without paying extra taxes or fees.