What happens to retirement accounts in a divorce in Michigan? Michigan is an “equitable division” state, which means that assets that were accumulated or obtained during a marriage are split fairly. Fairly usually means equally.
In the case of retirement accounts, the portion of the retirement account that has been earned during the marriage (called the “Marital Portion”) is usually split equally between the parties. This can be confusing.
For example, if one spouse marries with a retirement account already started with $10,000.00 in it and during the marriage puts in an additional $5,000.00, making the balance $15,000.00, we would subtract the amount that was in the account before the marriage to calculate the amount that was earned during the marriage, $5,000.00 is the marital portion. Any assets earned before marriage are usually considered separate assets that cannot be divided in a divorce.
This doesn't mean that you will need to withdraw your retirement money and write a check to your spouse, that would result in a tax liability to you. Splitting retirement accounts is done via a "Qualified Domestic Relations Order", also known as a QDRO. Please read more information about QDROs here.
If you have questions about divorce and retirement assets, see an attorney today to protect your interests! 269-381-4471