Retirement benefits are a unique asset in North Carolina divorce cases. Retirement benefits may consist of Social Security benefits, 401(k) savings, IRAs, a pension, or other types of retirement savings. These may have accumulated before and during the marriage. For people under the age of retirement, it may still be a number of years before they can begin withdrawing the benefits. However, after a divorce, the couple will likely want to settle all shared assets as soon as possible.
There are a number of options for separating or divorcing couples who have a shared interest in retirement benefits. If you have any questions about retirement benefits or other assets to divide in a divorce or separation in North Carolina, talk to the experienced divorce attorneys at Caulder & Valentine.
Retirement Benefits May Be a Joint Asset
Retirement benefits earned during the marriage are generally considered marital property in North Carolina. These assets are subject to equitable distribution between the spouses upon divorce. A domestic relations order may provide that a divorced spouse gets a share of a pension or other retirement benefit. However, some retirement plans will not make direct payments to former spouses.
Settlement Agreement to Limit Retirement Benefits
A common approach is to negotiate restricted rights to retirement benefits in the settlement agreement. By giving the rights to retirement benefits to one spouse, the benefits can generally stay put and be accessed as anticipated, upon retirement. In order to be enforced, such agreements generally need to be agreed to by both parties.
Social Security Benefits
Limiting the rights to retirement benefits in a settlement agreement can even apply to some Social Security payments. However, it generally does not apply to ex-spousal Social Security benefits. The amount of benefits a divorced spouse gets has no effect on the amount of benefits the working spouse has or benefits for a new spouse if the working spouse remarries.
Benefits as a divorced spouse are generally equal to one-half of your ex-spouse's full retirement amount, if taken at full retirement age. To be eligible for ex-spouse benefits, the individual would be available where:
- Your marriage lasted 10 years or longer;
- You are unmarried;
- You are age 62 or older;
- Your ex-spouse is entitled to Social Security retirement or disability benefits; and
- The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse's work.
Should I Take More Money Now Instead of Retirement Benefits Later?
It can be complicated to balance the value of retirement assets at a time when they are not accessible. Some divorcing spouses take an asset like the family home in lieu of retirement assets. However, over time the property may lose value or require regular repairs and expenses while the value of the retirement account continues to appreciate. Before signing away your rights to retirement benefits, make sure you understand the full value in the present and in the future for any shared marital property.
North Carolina Divorce Lawyers in Shelby
If you have any questions about retirement benefits in a divorce and how giving up rights to retirement assets will affect you in the future, the skilled attorneys at Caulder & Valentine are here to help. Contact us today for a consultation.