Pursuant to Family Code Section 760, community property in general is all property acquired by a married person during the marriage other than property acquired by gift or inheritance. But where does the retirement plan factor in? A retirement plan acquired during marriage is generally considered community property and spouses will each have a one-half interest in this asset regardless of which spouse actually made the payments. The issue becomes more complex when a retirement plan was acquired before marriage but a spouse also made contributions to the plan during the marriage. If a retirement plan has been contributed to during the marriage, the community can have an interest in the plan that is less than the total value of the plan because there is a separate interest in the contributions made before marriage.
For example if a wife had a retirement plan she was contributing to for 20 years before the marriage and then contributed to the plan for only 10 years during the marriage we would have a plan with both a separate property interest and a community property interest. We understand the contributions made before marriage are the wife’s separate property, but those contributions made for 10 years during the marriage are community property for which each spouse has a one-half interest. The court will have to apportion the community property (acquired during the marriage) and separate property (acquired before marriage or after the date of separation) interests.
Division of the community interest in a retirement plan can be a complicated issue, particularly when contributions were made to the plan before the marriage and the community has an interest in some but not all of the plan. Also, in many cases a retirement interest will not vest for several years and the parties will need to obtain an actuarial valuation to determine the value and respective interests. Because division of retirement plans and other community property issues can be complex and present many traps for the unwary, it is always best to consult with a family law attorney on these issues.
For more information about community property and other family law matters, contact The Reape-Rickett Law Firm, at 661-288-1000, located at 25152 Springfield Ct., suite 100 in Valencia, or visit www.divorcedigest.com.