There are two types of retirement assets, a classic pension and the more common retirement savings account like a 401(k), 403(b), IRA and the like. In a New York divorce or separation, the marital portion of a retirement account is identified, then that portion is divided equitably.
If a retirement account was started during the marriage, then the account is entirely marital and all of it would be subject to equitable distribution upon a divorce or separation.
If the retirement account was started before the marriage, then the premarital portion is not subject to equitable distribution, only the portion that was earned during the marriage is divided in a divorce.
For example, if you had $100,000 in your 401(k) at the date of marriage, and $400,000 at the date of the divorce or separation, the $100,000 is your separate property. This is not the end of the inquiry, as increases due to passive market forces on the separation portion are also separate property and not divided. In other words, since retirement accounts are subject to market forces as they are held in various funds and investments, passive market gains on separate property are not divided. So, if that $100,000 as of the date of marriage is now worth $200,000 due to market forces, then the $200,000 is separate property.
Market forces on the marital portion, on the other hand, are divided. So, if there were contributions during the marriage to the retirement account of $100,000, and due to market forces the $100,000 in contributions are now worth $175,000, the $175,000 is divided upon divorce.
Reach out to talk about your specific questions and how to establish not only the premarital portion but the gains and losses on the separate property.
