One very large hurdle to overcome by people getting divorced is agreeing how and when to divide the retirement plan assets each, or both, have accumulated during the marriage.
Their first surprise is the fact that the value of the marital portion of their retirement plan assets is the first or second largest asset in their marital estate. This means that very careful attention needs to given to the sharing of this marital asset. Their second surprise is the fact that there is not one place (on the internet or within their team of advisors) that would guide them thru the maze of optional ways retirement plan assets can be divided between divorcing parties.
For example, many marriages begin with one or both parties having been employed for some time, where that employment provided for participation in a retirement plan. Therefore, the portion of the retirement plan benefit or account that accrued during the marriage did not begin at zero. And, there are several ways to determine how to exclude, or partially reflect, the portion of the benefit or account to be divided which is attributable to the pre-marital years.
Moreover, a serious deliberation is needed with regard to the various ways to divide the retirement plan assets between the divorcing parties. If we know the value of the retirement plan assets, do we just offset it against one or more of other marital assets? Or, do we distribute the shares now? later? or at some other point in time?
Finally, some very special issues typically arise in reviewing the marital assets attributable to retirement plan assets. These include, but are not limited to, retirement plan funds that were previously distributed to an IRA for one or both parties; retirement plan funds that were borrowed during the marriage; special bonus retirement benefits provided only to a select few.
The booklet described at www.divorcepensionrights.com sets forth, in one place, a comprehensive guide for divorcing parties, and their advisors, to answer all of the above, and more.