At the same time that divorce rates go down for younger Americans, they are on the rise for older adults. Because older couples have had more years to build up financial assets, this can often mean that there is more financially at stake in divorce, and judges presiding over marriages of longer duration are more likely to order that alimony be paid for longer periods of time. And if retirement is on your horizon, there are a number of specific issues you will want to keep in mind as you head into the divorce process.
Your Retirement Savings Will Be Split Regardless of Who Earned Them
Under Virginia law, a divorcing couple’s property can be divided between them based on the concept of equitable distribution. This means that any property, including retirement, which was acquired or earned during the marriage is presumptively considered marital property, and the entire pool of marital property will be split “equitably” between the spouses, regardless of whether one or both spouses worked, or how much each earned and/or saved. Thus, any retirement savings accumulated during the marriage will subject to division between the divorcing spouses. “Equitable” in Virginia does not necessarily mean equal. The court will look to a list of factors as to how to specifically divide retirement assets.
Retirement and Pension Distributions May Be Split Between The Spouses…
As with savings, any pension and/or retirement distributions that you receive in retirement can be considered marital property, subject to equitable distribution between the spouses in a divorce. This is the case regardless of which spouse performed the work that went into funding the retirement/pension accounts. That said, if any portion of the retirement/pension account is attributable to work done by a spouse prior to the marriage (e.g. a spouse paid into a retirement account for 8 years before getting married), the portion of the distribution attributable to the pre-marriage work is presumptively separate, assuming the pre-marriage amounts can be appropriately traced, and would be the employee spouse’s portion.
…And Can Continue Even After a Non-Working Spouse Remarries
When a judge awards spousal support to one spouse, barring an agreement otherwise, the spousal support will only be required to be paid until the receiving spouse remarries, the death of either party, or the cohabitation of the receiving spouse with a person in a relationship analogous to a marriage in excess of one year. The division of retirement distributions, though, is not the same as spousal support. Because the retirement benefits are considered marital property, the distributions may continue to be split between the divorced spouses even where one or both remarries or the receiving spouse cohabits with another person.
You May Have to Pay Spousal Support Even if You Were Planning to Retire
A judge can order spousal support based in part on the potential income that a spouse might earn, as opposed to the actual income that the spouse chooses to make. Thus, if a spouse decides to stop working or essentially retire earlier than they might otherwise have done, a judge may nonetheless order the spouse to pay spousal support as if he or she were earning a salary.
You May End Up Working Longer Than You Planned
Because both spouses may face a loss in their retirement savings or in their shared income they were enjoying, or they may end up paying spousal support obligations that they had not planned on, their financial picture can end up looking a lot different than before the divorce. Add to this the fact that two ex-spouses living apart generally face higher expenses (e.g. two homes instead of one), the end result could be that both spouses end up having to put retirement off for a little longer.
Work with Experienced, Compassionate Family Law Attorneys
Because your retirement plans can be thrown for a curve by a divorce, it is important for divorcing spouses facing retirement to make sure they get the best representation they can in their divorce to ensure that their financial interests are treated fairly in the divorce and beyond.
The family law attorneys at Kurylo Gold & Josey, PLC in Fredericksburg are here to help you with all of your questions regarding divorce in Virginia. To schedule a consultation with one of our Virginia family law attorneys, contact Select Law Partners at 540.642.1766.
Matt Kurylo
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