Are Retirement Accounts Marital Property?
Many Lexington couples are surprised to learn that retirement accounts are often considered marital property — even if the account is in only one spouse’s name.
In South Carolina, any portion of a 401(k), pension, or IRA earned during the marriage is subject to division in divorce. Anything earned before the marriage or after separation is typically separate property.
How South Carolina Divides Retirement Funds
South Carolina follows equitable distribution, meaning assets are divided fairly — but not always equally.
Judges in Lexington County consider factors like:
- Each spouse’s income and financial contributions
- Length of the marriage
- Whether one spouse supported the other’s career or education
- Each spouse’s future earning potential
- Non-financial contributions, such as childcare or homemaking
The court’s goal is fairness — not necessarily a 50/50 split.
The Role of a QDRO (Qualified Domestic Relations Order)
For 401(k)s and pensions, dividing funds requires a special court order called a QDRO (Qualified Domestic Relations Order).
This legal document tells the retirement plan administrator how to transfer a portion of one spouse’s account to the other without tax penalties or early withdrawal fees.
An attorney can help ensure the QDRO matches both your divorce decree and the plan’s rules — small errors can lead to major financial losses.
Common Types of Retirement Accounts Divided
- 401(k)s and 403(b)s: Employer-sponsored savings plans.
- Traditional and Roth IRAs: Usually split directly between spouses.
- Pensions: Can be valued based on years worked and benefits earned.
- Military and Government Plans: Have specific rules under federal law.
Each type requires different paperwork, so it’s important to work with an attorney familiar with both family law and financial documentation.
Can You Protect Your Retirement Savings?
In some cases, you can negotiate to keep your retirement account by giving up other assets of equal value — such as equity in a home or a vehicle.
Planning ahead matters. Before filing for divorce in Lexington, gather:
- Current account statements
- Employer plan summaries
- Historical contributions and vesting schedules
These details help ensure your financial future is accurately represented in court.
Quick FAQs
Is my 401(k) automatically split 50/50 in South Carolina?
No. The court divides assets fairly, based on each spouse’s contributions and financial needs.
Do we need a QDRO for every retirement account?
Only for certain plans like 401(k)s and pensions — IRAs can usually be divided directly.
Can my spouse get part of my retirement if we were only married a few years?
Possibly, but the court may award a smaller share based on the short duration.
Need Help? Reach out
Dividing retirement savings is one of the most important financial steps in a divorce. Call The Farley Law Firm today to schedule a confidential consultation and learn how to protect your future in Lexington family court.
Disclaimer
This information is for general education only and is not legal advice. Schedule a consultation to discuss your case.