Property division is a difficult challenge to overcome during a divorce. Many spouses find themselves disagreeing about what is fair or appropriate. They may even disagree about what assets are subject to division. If they can’t reach their own settlement, then they must go to court and ask a judge to apply the state’s equitable distribution statute to their marital assets and debts.
Couples preparing for divorce generally need to make disclosures to one another about their resources and debts. They have to divide all financial obligations and resources that are part of the marital estate.
Some property remains separate, which means it belongs directly to one of the spouses. Is a pension or retirement account held by one spouse their separate property during a divorce?
Accounts are often divisible
Sometimes, people assume that the ownership records for certain assets determine who has a claim to those resources in a divorce. However, simply establishing a separate financial account during marriage does not convert the funds deposited into the account to separate property.
Anything earned during marriage is marital property, including funds contributed to retirement savings accounts. Even matching deposits made by employers are subject to division. In some cases, a portion of the account or pension might be separate because the account holder accrued that balance before marriage. Deposits made during the marriage are subject to division or may influence the division of other property unless there is a marital agreement that addresses the account.
Reviewing the marital estate can help people prepare for the challenges of divorce. Spouses who know what assets they have to divide can focus on achieving fair results.