Divorce proceedings usually involve assigning a value to everything that is considered marital property. In Rhode Island, pensions are treated as shared property, making them subject to equitable division in a divorce. Although it may be easier to have each spouse keep the policy that is under his or her name, this usually leaves one spouse’s retirement grossly undervalued. 
Considerations for Pensions and Retirement Accounts in Divorce
Estimating the value of pension and retirement accounts held by both spouses is one of the more difficult aspects of asset division and should be done by an experienced divorce attorney. The right legal advice can be invaluable in dividing pension and retirement accounts, especially those that involve:
Separate property.
If any funds in a pension were earned by one partner before marriage, these funds (and the interest earned on them) are not considered a marital asset and do not have to be split with the divorcing partner.
Special qualifying orders.
Most pensions are legally divided by a document known as a Qualified Domestic Relations Order (QDRO). This order is signed by a judge and presented to the plan administrator, ensuring that both spouses will receive a portion of the benefits when the pension funds are distributed. However, some types of pensions, including military, police, fire, or government pensions cannot be divided by a QDRO. An attorney can request the appropriate order for the type of pension, meet filing deadlines applicable to each type of pension, and make sure the court order is implemented correctly to ensure payment to the client.
Early withdrawal.
Many retirement accounts such as a 401(k) involve funds matching through an employer and a set date when the funds can be accessed. Withdrawing these assets before the access date is costly, and both parties can be subject to penalties or increased taxes for early withdrawal. An attorney can advise you on how best to avoid early-withdrawal penalties and tax consequences.
Individual provisions.
Pension and retirement plans have a number of provisions and exceptions that must be addressed during a divorce. For instance, an ex-spouse may lose his or her rights to survivor benefits if a partner dies before retirement. An attorney should calculate the additional cost for life insurance for former spouses, as well as the value of the lost benefit.
Do You Need To Speak To A Rhode Island Divorce Attorney?
If you are considering a divorce you need to speak with an experienced Rhode Island divorce attorney as soon as possible. Please contact us online or call our Warwick office directly at 401.946.3200 to schedule your free consultation. We help divorce clients in Providence, Warwick and all areas of Rhode Island.
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