Virginia Retirement Funds and a Divorced Spouse's Rights
Many couples invest in the future during their marriage by saving for retirement. Sometimes your spouse's employer will contribute to a retirement plan; other times, saving is up to the employee alone. In either case, spouses are entitled to a portion of the other's retirement benefits in Virginia if they divorce.
Virginia defines the marital share of any retirement plan as that which accrued between the date of the marriage and the date of final separation. The state's code provides that each spouse is entitled to up to 50 percent of that portion. Virginia is an equitable distribution state, so you may not have a right to exactly half your spouse's retirement funds – the court will divide the accounts in a way that seems fair. Virginia law bars the non-earning spouse from receiving more than half of the other spouse's retirement benefits, so you won't receive more than 50 percent.
If both you and your spouse have retirement benefits, you're both entitled to a share of the other's. In this case, the values are usually set against each other and the court divides the difference. For example, if you have a $100,000 retirement plan, and if your spouse's benefits are valued at $150,000, there's an imbalance of $50,000. If the court determines that you and your spouse should divide your retirement funds equally, you would be entitled to $25,000, or half of the $50,000 difference, in other marital property.
Qualified Domestic Relations Orders
Dividing many retirement accounts – including defined benefit pensions, 401(k)s and some profit-sharing plans – requires an extra step post-divorce. Most retirement plans involve implementation of a QDRO, or qualified domestic relations order. This is a separate court order from your decree. The plan's administrator must approve its language before you submit it to the court for a judge's signature. After signing, it becomes an official court order. You must then forward it back to the plan administrator. The plan will usually disburse whatever portion of your spouse's benefits you receive directly to you when he retires.
Virginia has a high population of military personnel, and military retirement plans have a set of rules all their own. Not all divorce attorneys have a firm grasp on these laws, so if you or your spouse is in the military, you might want to consult with a lawyer familiar with the complexities of military retirement plans. Federal law – not Virginia law – governs both disability retired pay and non-disability retired pay, and non-disability retired pay terminates with your spouse's death unless he takes special steps to ensure otherwise. In either case, the federal government determines the share you have a right to.
Beverly Bird has been writing professionally for over 30 years. She specializes in personal finance and w, bankruptcy, and she writes as the tax expert for The Balance.