Are You Getting Married? Protect Your Retirement Benefits

Pension benefits and money in Roth IRAs, 401ks, or other retirement accounts play an important role in your future well being and financial security. When getting married, whether it is for the first time or after a previous divorce, it is important to follow some simple asset protection strategies to preserve these accounts, ensuring the funds they contain are available when you need them. While discussing such matters with your future spouse may feel awkward, it can help open the lines of communication and ensure that both of you are on the same page when it comes to financial planning.

Retirement Benefits and Your Marriage 

Whether you are a younger person who has just begun working and saving money in retirement accounts or you have put in years to accumulate these assets, it is important to be aware of how these benefits are viewed in terms of your marriage. Once you officially ‘tie the knot’, any money or property earned, acquired, or otherwise accumulated from that date will be considered marital property, meaning that it is fair game in the event you and your partner eventually decide to file for a divorce.

Under New York domestic relations laws, New York is considered what is known as an equitable distribution state. This means that in the event of a divorce, any marital property is divided on a fair but not necessarily even basis. This property includes your pension benefits and retirement accounts. Even if your partner did not contribute either directly or indirectly to these funds, they could still be entitled to a significant share as part of a divorce settlement or order. Factors the judge is likely to consider in awarding your spouse a portion of these benefits include:

• The age and health of both spouses;
• The length of the marriage;
• Each person’s income and earning potential;
• Any career or education sacrifices made by either spouse in support of the other or the marriage;
• Any non-marital assets each possesses

Protecting Retirement Benefits Prior to Marriage

U.S. News & World Report advises that having your attorney draft a prenuptial agreement is a smart idea for protecting your assets, while also helping to clarify your estate plans. Benefits include:

• Full financial disclosure of assets from both spouses;
• Allows honest communication about spending habits, future financial goals, and retirement planning.
• Preserves your individual retirement benefits;
• Protects premarital assets and inheritances or family businesses;
• Makes sure heirs other than your spouse are also provided for, such as children from previous relationships.

If you are already married, it is not too late. A postnuptial agreement can accomplish many of the same purposes.

Reach Out to Us Today for Help

At Cavallo & Cavallo, preserving your current and future financial security is our top priority.  To discuss how to protect your assets and the potential consequences your marriage could have on estate plans, reach out and contact our New York asset protection attorneys to request a consultation in our Bronx or Westchester office today.

Resources:

nysenate.gov/legislation/laws/DOM/A10

money.usnews.com/money/retirement/baby-boomers/articles/how-to-protect-your-retirement-before-a-second-marriage