Are IRAs considered marital property?

Are IRAs considered marital property?

Retirement accounts are marital property, which means they are subject to equitable distribution. Depending upon the length of the marriage, the funds deposited in the retirement account(s) before the marriage are reserved to the individual who brought them into the marriage rather than being divisible.

How are IRAs handled in a divorce?

IRA funds can be transferred tax free from one spouse to the other only if allowed under a court-approved divorce decree or legal separation agreement. Generally, IRAs are included in property settlement agreements between married couples who divorce.

Are 401k assets protected from divorce?

Any funds contributed to the 401(k) account during the marriage are marital property and subject to division during the divorce, unless there is a valid prenuptial agreement in place. For example, if your spouse also has a retirement account worth a similar amount, you may each decide to keep your own accounts.

How is divorce settlement calculated?

A fair settlement should first identify marital and separate property and address only how marital property is divided. You should also look at your state’s laws on how property is divided. States usually follow one of two ways to divide the property: 50/50 (community property states) or through equitable distribution.