plan to marry. Despite your best intentions, you may find yourself in an untenable situation. Maybe the two of you have opposing political opinions and can no longer even converse civilly with each other. Perhaps your spouse cheated on you, and you know you will never forgive them.
You believe that divorce is likely the appropriate solution, but you’ve probably heard horror stories from other people who decided to end their marriage or got served unexpectedly by their spouse. It’s natural to worry about what will happen with your finances after you file for divorce, especially if you’re close to retirement age.
Are your retirement savings at risk in an Arizona divorce?
Community property rules apply to almost everything
Part of promising to spend your life with someone else is the tacit agreement to pool your assets and cover each other’s financial obligations. Unless you have a marital agreement, what you earned during marriage is marital property, so the contributions from your paycheck to your retirement savings are also marital property.
What you contributed before your marriage or after a formal separation won’t be at risk, but you could very well have to divide your account in half to share with your spouse under Arizona’s community property laws.
How can you protect your retirement account?
You and your spouse have the option of negotiating an agreement and settling property division matters on your own. If retaining the full balance of your retirement account is your biggest goal in your divorce, you can make that your priority during negotiations or mediation. You might allow your ex to keep other assets, like your small family business, to make up for the value of your retirement account.
If you can settle matters on your own, you can potentially reach any arrangement that works for both of you. Otherwise, a judge will order the division of your retirement account along with other property in accordance with Arizona state statute. Learning about the rules that apply in property division matters can help those contemplating divorce in Arizona.