For Alabama couples who are getting a divorce, property division is a common source of discord. This is especially true if the parties have accrued significant assets during their time together. Like many states across the nation, Alabama uses equitable distribution to split marital property. This means the court will strive for fairness. It does not mean the property is shared equally. A question that often arises in this context is how retirement benefits are shared between the parties. Knowing the law is key to reaching a satisfactory resolution.
Retirement benefits in a divorce can be complicated
Disputes over retirement benefits might turn acrimonious. One side might say that he or she earned the benefits during their professional career. The other can claim that they are entitled to a portion of it because of their contributions to the marriage. This can include the retirement plan, a retirement account, a pension, a savings plan, an annuity and a profit-sharing plan. It could be from any type of employment whether it is in the public sector, the private sector or the military.
The law states that the limit to be paid to the spouse who was not receiving benefits in the retirement plan is 50%. The parties can agree to a different split of the retirement account if they decide to. If one side is saying that the interest in the retirement benefits should not be part of the marital estate, it must be proven and the value of the benefits shown. That will include income that was accrued passively or if it appreciated in value. The court can essentially do as it sees fit in dividing retirement assets provided it does not go beyond 50% each and it is considered equitable. Increases in value will be prorated if they occur after the court makes its determination until the account is distributed.
It is important to remember retirement assets in a divorce
When there is a divorce and the parties have assets like a home, bank accounts, collectibles and automobiles, these items will frequently come to the forefront. It is important to remember that retirement accounts can also be extremely valuable and there are requirements as to how they will be divided. Having professional guidance and representation is beneficial to be protected to ensure this issue is given the proper amount of attention and a fair distribution is made.