How can I protect my interest in our retirement accounts?

Our savings are mostly in retirement accounts in my spouse’s name with his employer. How can I protect my interest during divorce?

According to California law, your interest in your spouse’s employer-sponsored retirement plans begins on the date of marriage and ends on your date of separation – all funds contributed during this time period are community property and your share is one-half (50%) of these funds. See, California Family Code §80, 2060-2074, 2610. Upon your request, your spouse is required to provide you with the name of each employee benefit plan, along with the name, title, address and telephone number of each plan’s agent for service of process.

To protect your interest during divorce, once a Petition for Divorce is filed, the retirement plans must be put on formal notice that a divorce is pending. This is usually accomplished by special pleadings that join the employer- provided pension/retirement plans in the divorce action. Once joined, the retirement plans are prohibited from distributing any funds without a Court order.

As part of full disclosure as required by California law, your spouse should provide you with photocopies of all account statements and plan brochures. You can secure (or verify) this information by issuing a subpoena to your spouse’s employer for retirement benefit information or to financial institutions for photocopies of retirement plan statements.
Your rights to receive your share of these benefits are usually perfected by a Qualified Domestics Relations Order (QDRO) or other Court order. QDROs are rarely drafted before the final Judgment has been entered. The QDRO process itself is usually handled by attorneys who specialize in this area.

If your spouse has a true pension plan, you may not receive your share of the pension funds until your spouse actually retires or reaches retirement age. Funds in 401k, 403b, and similar plans are usually distributed in a lump sum once the retirement plan receives a certified copy of the QDRO.
Your share of such retirement plans may be expressed as a fraction (or percentage) of the overall plan based on the time rule – the numerator is the period of participation in the plan during marriage before separation and the denominator is the total period of participation in the plan, or it may be calculated as a specific monetary amount based on the contributions to the plan during the marriage. If the funds are invested in the stock market, the QDRO generally provides that you are entitled to all increases or decreases attributable to market fluctuations from the date your interest is determined (e.g., date of separation) until your receipt of the funds.

Pauline Rosen is a divorce attorney and the founder of the Law and Mediation Offices of Pauline Rosen, located in the South Bay (Los Angeles), providing compelling, competent advocacy with compassionate client-centered legal services, including family law, collaborative law, and mediation. She is the recipient of the American Jurisprudence Award in Ethics, Counseling, and Negotiation and in Criminal Procedure and is listed in Who’s Who (1999).