How is retirement divided in divorce when only part of the years served were covered by the duration of the marriage? This is a question of “community property” and “separate property” and a recent California Appeals Court case sheds some light on this issue.
For example, if the retirement in question was based upon 30 years of service and the marriage between the parties existed for 20 of those 30 years the retirement asset would generally be considered to be two-thirds community property and one-third the separate property of the retirement account holder.
This is based on the “time rule” which basically takes the length of marriage divided by the total time of service upon which the retirement was based. In California, community property is to be divided equally. If the balance in the retirement account in question was $900,000 the division would look something like this:
$300,000 (or 1/3 of the amount) is the separate property of the account holder
$600,000 (or 2/3 of the amount) is considered to be community property
Therefore, the spouse of the retirement account holder would normally be awarded half of the community property portion of the account’s value which in this case is $300,000 while the account holder would retain $600,000 of the balance.
The spouse in the appellate case challenged this ruling based upon the percentage of contributions which were made to the account during the term of the marriage. The spouse’s argument claimed that 87% of the funds paid into the retirement account occurred during the marriage, and therefore the community property interest in the account should also be 87%.
The appellate court rejected her argument in this case because the value of the retirement amount was based upon length of service and the average salary during the final year prior to retirement, and not the amount contributed.
How is retirement divided in divorce when only part of the years served occurred during the marriage? How is spousal support handled in this type of long term marriage? These questions are legally quite complex and it is best to seek the advice and counsel of the experienced Certified Family Law Specialists at Burke & Domercq.
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