We recommend securing retirement assets with a prenuptial agreement before your marriage, or a postnuptial agreement after you are married. These are legally binding agreements that establishes how the property and the financial rights of each spouse is to be divided in the event of a divorce.
If you decide not to execute a prenuptial agreement before your marriage, or a postnuptial agreement after your married, then the future of your retirement is unknown. That is not only the portion earned during the marriage, but any premarital portion of a retirement plan. Courts do not have to give credit for monies earned or held prior to the marriage.
Contributions to the plan and other such benefits which accrued during marriage are considered marital property. Any income produced by the retirement plan, including reinvested income, is also considered marital property. Marital property is divided in divorce. There is not an automatic 50/50 division.
You can choose to divide each party’s retirement account by a certain percentage, each keep your own or a specific dollar amount. The unknown can be avoided by discussion with your partner and drafting those decisions in your prenuptial agreement or postnuptial agreement. The choice is yours – the parties to the marriage decide or the judge.