Most couples know that divorce can impact their financial future. The transition from a two-income household to a single-income home is challenging for most couples, and asset division can leave you with less savings and fewer possessions to use. However, many people do not know that divorce can also be a significant setback for their retirement savings.
A prenuptial agreement could protect your retirement savings.
Just as a prenuptial agreement or a postnuptial agreement can protect your savings or your business, it can also protect your retirement savings. These agreements can define your retirement accounts as separate property or establish how much of your retirement account your spouse will receive.
Minnesota courts work to divide your property equitably.
Minnesota is an equitable division state and works to create a division of marital property that is fair or equitable rather than strictly equally. As a result, the assets that you and your spouse have gained during your marriage are marital property, but you may be able to have some say in their division.
In a divorce, you and your spouse could keep your own retirement accounts if they are of similar value. However, if you have significantly different incomes or if one of you has taken time away from work to care for your children or your home, this may not be considered a fair solution.
You and your spouse could also divide your retirement accounts equally. However, dividing employer pensions can add more complexity to this division. The court may order that these pensions are divided when they are dispersed, or the receiving spouse may be required to pay spousal support once the pension becomes active.
Another solution that you may consider is allowing one spouse to keep the retirement accounts but granting the other another asset of a similar value.
No matter how your property is divided, your attorney can help you create a fair solution that protects your finances both today and in the future.
