Michigan divorces can be very complex family law matters. Particularly when spouses remained married for many years or have significant shared resources, divorce proceedings may quickly become complicated. Emotions tend to flare, and spouses may have a hard time reaching an agreement on how to handle certain issues.
The property that belongs to the spouses can easily trigger conflict between them. People often disagree about what is an equitable or fair way to split their marital assets. For many Michigan adults contemplating divorce, their future financial stability is a main concern throughout the process. They want to preserve as much of their property as possible. Some people focus on particular assets that have a high value or provide peace of mind.
Divorce could very easily affect someone’s retirement plans. Not only is it a major expense, but it is also a process that diminishes someone’s personal wealth through the division of their property. Well-funded retirement savings accounts can be as emotionally beneficial as they are financially valuable. If someone has a retirement savings account, which spouse keeps those resources in a Michigan divorce?
Retirement funds may be subject to division
Someone’s retirement savings may be in an account held by their employer or a professional financial advisor. Many times, such accounts are only in the name of one spouse. The individual who owns the retirement account could make the mistake of assuming it is their separate property.
However, that is likely not the case. It is important for people to realize that the timing of deposits into the account typically matters far more than the name of the person who opened the account. At least some of the account’s value is probably marital property for the purposes of property division. Any contributions to the account during the marriage could be subject to division unless the spouses have a pre-existing agreement stating otherwise.
Spouses might need to actually divide an account. They can achieve this without penalties and taxes if they use a qualified domestic relations order (QDRO). Other times, spouses may simply need to consider the marital portion of the account when dividing other assets.
For some people, preserving their retirement savings could be the most important objective in a Michigan divorce. Setting clear goals early in the divorce process may help people achieve the best possible outcome as they seek to legally end their marriages.