Divorce is a painful experience, and it gets even more complicated when it comes to dividing the property, assets, and retirement benefits. Retirement benefits are among the central assets couples amass during the marriage, and dividing them is increasingly becoming complicated. With 41% of marriages in Missouri ending in divorce, understanding the legal overview of divorce and retirement benefits in Missouri is essential.
Laws Governing Retirement Benefits During Divorce in Missouri
A divorce in Missouri is regulated by state law, and the laws relating to retirement benefits are no exception. Missouri legislation permits the division of retirement benefits earned during the marriage. Retirement benefits earned before the marriage or after separation are not subject to division.
What are Retirement Benefits?
Retirement benefits refer to proceeds from an employee benefit plan resulting from an employer’s contributions and the employee’s contributions over time. Retirement benefits may come in various types, and some of the most common in Missouri include:
- Employer-sponsored pension plans
- 401(k) plans
- Individual Retirement Accounts (IRA)
- Social Security benefits
Dividing Retirement Benefits
Missouri laws are stringent on how retirement benefits are divided, and couples must follow specific procedures when dividing retirement benefits.
The QDRO – Qualified Domestic Relations Order
A Qualified Domestic Relations Order (QDRO) is a court-issued order outlining how retirement benefits are divided in a divorce case. The QDRO allows for equal distribution of retirement benefits between both spouses.
Factors Considered when Dividing Retirement Benefits
In Missouri, laws require the court to consider the following factors when dividing retirement benefits:
- The value of the retirement benefits
- The marriage duration
- The economic circumstances of each spouse
- The earning capacity of each spouse
- The financial resources and properties owned by each spouse
Division of Pension Plans
Pension plans are among the most commonly shared retirement benefits in divorce cases. In Missouri, spouses are entitled to receive a share of the pension plan during the marriage. The share is calculated based on the number of years of marriage, employment years, and promotion.
Division of 401(k) Plans
401(k) plans are tax-deferred retirement savings plans. The plans allow an employee to make contributions to the plan reducing their taxable income. In a divorce case, 401(k) plans are divided by the court following the QDRO procedure.
Division of IRAs
Married couples can leverage IRAs to save for retirement. In a divorce case, the divorce decree determines the fair distribution of IRAs between spouses. The decree may require dividing the account equally or awarding it all to one spouse.
Conclusion
Retirement benefits are crucial assets in any marriage. In Missouri, there are specific laws governing the division of retirement benefits during a divorce case. Understanding these laws is essential, as violating the laws can have far-reaching consequences. Spouses should seek legal advice and ensure they go through the right legal procedures when dividing retirement benefits.