
Divorce can upend your life. When it comes to dividing your finances, you have a long list of decisions to make. Retirement accounts are some of a couple’s biggest assets. Figuring out how to split them can seem complicated and stressful.
What do you need to know about dividing retirement accounts in a divorce? If you are worried about what will happen to your 401(k), IRA, or pension in a divorce, here are steps to protect your financial future.
Are Retirement Accounts Considered Marital Property?
In most cases, the answer is yes. Any retirement savings or contributions made during the marriage are considered marital property. This can include:
- 401(k)s
- Pensions
- IRAs
- Employer-sponsored plans
However, funds you saved before the marriage might be treated as separate property. Keep in mind that if an account was opened before you tied the knot, any growth or contributions made during the marriage could still be subject to division.
How Are Retirement Accounts Divided in Divorce?
Since Tennessee is an equitable distribution state, retirement assets are divided fairly. However, “fair” does not always mean a 50/50 split. The court will look at factors, such as:
- The length of the marriage
- Each spouse’s income and earning capacity
- Contributions to the household
Remember that splitting a retirement account does not always mean getting a check. In some cases, one spouse keeps the full account while the other receives assets of equal value, like the marital home.
Why You Might Need a QDRO
If you or your spouse has a 401(k) or pension, you might need a Qualified Domestic Relations Order (QDRO) to divide it. This order tells the plan administrator how to split the account without triggering taxes or early withdrawal penalties.
Without a QDRO, transferring funds could result in major tax consequences. A QDRO may not be necessary for IRAs, but the transfer must still be handled carefully to avoid taxes.
What About Tax Implications?
Retirement accounts can be complicated when it comes to tax rules. Keep in mind that if the funds are withdrawn and transferred the wrong way, you could face early withdrawal penalties and income taxes.
Also, the spouse who receives part of the account will become responsible for any taxes when they withdraw the funds in the future.
For that reason, you will want to work with a divorce attorney to avoid any mistakes that could cost you thousands in tax problems.
What About Pensions?
Sometimes, pensions fall into a gray area, especially if they will not pay out until retirement. If they were earned during the marriage, they might be considered marital property.
You may be entitled to a share of your spouse’s pension payments, or they may be entitled to yours. Courts use a formula to determine how much of the pension was earned during the marriage and how it should be divided.
Protecting Your Future Finances

Retirement accounts represent years of hard work and planning. It is natural to feel anxious when you are in the middle of a divorce. Here are a few steps you can take to protect yourself:
- Collect records: You will want to gather statements, plan documents, and contribution histories for all retirement accounts.
- Understand the value of your accounts: Not all accounts are created equal. For instance, a Roth IRA and a traditional 401(k) may have the same balance but different tax implications.
- Get professional guidance: An experienced divorce attorney and financial advisor can help you throughout this process and protect your financial future.
We Offer Legal Guidance to Protect Your Assets
Dividing retirement accounts in a divorce can put you into a stressful situation. You will want to have an experienced Tennessee divorce attorney on your side.
At Easter & DeVore, Attorneys at Law, we can help identify which accounts are marital property and make sure they’re divided properly and fairly. Schedule a consultation with us today.