How Are Retirement Accounts Divided in An Arizona Divorce
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Division of Retirement Accounts in an Arizona Divorce
Many people going through a divorce in Arizona ask us how are retirement accounts divided in an Arizona Divorce.
Let’s start our discussion with the Arizona Supreme Court case of Van Loan v. Van Loan.
The court concluded that retirement assets, including pensions, are treated in the same manner as all other community property in Arizona and are, therefore, divided between the spouses in a divorce.
The court will apportion the community property interest in retirement accounts between the spouses and will award each spouse his or her separate property portion of those retirement accounts.
There are several ways to determine the community and separate property interests in a retirement account.
The approach used depends on the type of retirement account to be divided.
Retirement accounts are either a “defined contribution” plan or a “defined benefit” plan.
A defined contribution retirement plan is a plan where you invest money that grows over time, like an IRA or 401(k).
You are only entitled to the value of the account.
A defined benefit plan is a plan where you may or may not invest money into the plan and you will receive a monthly amount at a certain age, like a pension.
You may or may not be entitled to the value of the account in lieu of or in addition to monthly pension payments; depending upon the plan.
The Arizona Supreme Court in the Johnson v. Johnson case presented an excellent analysis of how retirement accounts are divided in a divorce in Arizona.
Specifically, the Arizona Supreme Court in the Johnson v. Johnson case established the ways the court may determine the community and separate property interests in these types of retirement accounts.
The actual division of the accounts occurs by rolling out an amount into a separate account for the spouse receiving an interest in the retirement account.
Alternatively, you can offset that spouse’s interest in the other spouse’s retirement account by awarding him or her more of some other asset.
If you are splitting a retirement account, you will need to prepare a special Order referred to as a Qualified Domestic Relations Order, which is an Order that directs the plan administrator as to how to divide the community property portion of the retirement account.
Division of Military Retirement in Arizona
Military Retirement Pay may also be divided in an Arizona divorce. However, special circumstances exist in certain cases of military benefits, such as Combat-Related Special Compensation payments and other forms of military disability payments that may not be divided in an Arizona divorce.
However, the Arizona Supreme Court in the unpublished Merrill v. Merrill case held that a trial court might order a spouse to compensate his or her spouse if the court previously awarded the division of Military Retirement Pay that is subsequently turned into Combat-Related Special Compensation pay due to the subsequent disability of the military spouse.
Since Merrill is an unpublished case, you are not permitted in almost all cases to cite the case as authority to the court.
If you need information about how a retirement account is divided in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona community property attorneys have over 100 years of combined experience successfully representing clients in divorce cases in Arizona.
Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.
Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona community property case around today.
Arizona Family Law Attorneys in Scottsdale and Tucson Arizona
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Chris Hildebrand wrote the information on this page about how are retirement accounts divided in an Arizona divorce to ensure everyone has access to information about divorce laws in Arizona. Chris is a family law attorney at Hildebrand Law, PC. He has over 24 years of Arizona family law experience and has received multiple awards, including US News and World Report “Top Arizona Divorce Attorneys”, Phoenix Magazine “Top Divorce Law Firms”, and Arizona Foothills Magazine “Best of the Valley” award. He believes the policies and procedures he uses to get his clients through a divorce should all be guided by the principles of honesty, integrity, and actually caring about what his clients are going through.