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Who gets to keep the retirement account when you divorce?

People considering divorce frequently start the process thinking that property division is a zero-sum game. They think that if they approach the courts the right way, they might walk away with just about everything or deprive their spouse of certain critical assets, like equity in the marital home or a portion of a retirement account or pension. 

The closer you are to retirement age, the more likely it is that you worry about retirement savings in a pending divorce. Will the courts give the entire account to one spouse or the other? How do they decide who gets to keep the retirement benefits?

Does the spouse who opened the account get to keep everything?

Some people mistakenly assume that retirement savings are separate property in a divorce. They believe that idea, in part, because it is common for one partner to already have an account prior to marriage. The account will likely only be in that one person’s name. 

You might think that the person who holds the account is the sole owner of the retirement savings you have accrued during your marriage. However, the Pennsylvania courts will take a more nuanced approach to your retirement than that. The chances are very good that they will split the retirement resources between spouses.

Equitable distribution aims for fairness

When a Pennsylvania judge has to decide how to split up your property, they have to do so in a way that seems fair based on your individual and family circumstances. 

Sometimes, they may order the actual division of a retirement account with one spouse receiving a portion of an account previously in the other’s name. The judge might also let one spouse keep the retirement account but give the other spouse substantial assets to replace that property value in the settlement. Regardless of who holds the account, both you and your spouse can probably expect to receive a portion of your retirement savings in a divorce.

Understanding how marital assets are divided in a divorce isn’t easy. It’s often best to discuss the specifics of your situation with an experienced advocate.