Retirement assets can make up a significant portion of your financial wealth. In Arizona, community retirement funds are typically divided between the spouses regardless of who contributed to the plan.

However, it may not be as straightforward as just looking at current balances and splitting the plan in half. There are unique challenges to dividing retirement accounts that can get complex depending on the type of plan and latest case law.


Some of the challenges that need to be addressed and resolved include:

  • How do you value the community portion of the account
  • Were there pre-marital contributions
  • Do you have a pension or similar type of account where present value does not exist, but can only be determine upon actual retirement
  • Did certain investments fare better than others
  • Do you have a mix of pre-tax and after-tax accounts
  • Do you have a Defined Benefit Plan or Defined Contribution Plan or both
  • Did you Rollover funds from a prior 401(K)
  • What about capital gains
  • Do you have military retirement plans
  • Are you exempt from social security distributions because you work in the public safety field

These types of questions must be answered to reach an equitable agreement and to assist in retirement planning.


If you are going to transfer funds from one spouse’s retirement account to the other as part of your divorce settlement agreement, a Qualified Domestic Relations Order (QDRO) may be required. If you don’t have a properly drafted QDRO, the Plan may be disqualified from distributing funds per your divorce agreement. Not all retirement division requires a QDRO but if you have several plans that do, you could be looking at multiple QDROs. Although QDROs share some general similarities, division of a retirement account is plan specific. So, you will typically need to obtain your Plan’s specific rules and procedures for processing QDROs and transferring funds.

Decisions on division of your retirement accounts are not made in a vacuum, but are one piece of the overall settlement picture. Working with seasoned retirement attorneys can help safeguard both of your retirement plans and your financial future.

A Certified QDRO professional can assist in:

  • Valuation of the community interest in your retirement plans
  • Preparation of QDROs accurately
  • Managing the QDRO process for you and communicating directly with your Plan(s)
  • Strategizing on alternative division so as to minimize the number of QDROs needed
  • Developing options for equalizing assets and debts in a different manner. For example, if one spouse prefers to keep a retirement account intact in return for the other spouse keeping more equity in property, that can be accomplished with careful calculations and tax considerations. Or all retirement assets could be equalized out of one account

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