Do I Have to Split My Retirement Accounts in Divorce?

Last Updated on October 30, 2025 by Sheen Ancog

Divorce can bring up countless financial questions, but one of the most common — and often most confusing — involves retirement accounts. After years of saving and planning for your future, the thought of splitting your hard-earned retirement funds can feel unsettling. So, do you really have to divide your retirement accounts when you divorce?

The short answer: in most cases, yes — at least partly. But how much you have to divide depends on several key factors, including the type of account, when the funds were earned, and the laws in your state.

Understanding Marital vs. Separate Property

Before diving into the details, it’s important to understand how the law distinguishes between marital property and separate property:

  • Marital property generally includes any assets acquired by either spouse during the marriage — including income, savings, and contributions to retirement accounts made while married.
  • Separate property includes assets you owned before marriage or received individually, such as through inheritance or gifts.

If part of your retirement savings was earned before your marriage, that portion is often considered your separate property and may not be divided in a divorce. However, any growth or contributions made during the marriage are typically subject to division.

Types of Retirement Accounts and How They’re Divided

Not all retirement accounts are created equal. The way they’re divided depends on the type of plan and how it’s structured:

1. 401(k), 403(b), and Other Employer-Sponsored Plans

These accounts are divided using a special court order called a Qualified Domestic Relations Order (QDRO). A QDRO tells the plan administrator exactly how to split the funds between spouses while avoiding taxes and penalties.

2. IRAs (Individual Retirement Accounts)

IRAs don’t require a QDRO but are instead divided under the terms of the divorce decree. The receiving spouse can roll the funds into their own IRA to avoid early withdrawal penalties or taxes.

3. Pensions

If one spouse has a defined-benefit pension plan, the other spouse may be entitled to a share of the monthly benefit payments once the pension starts paying out. Like 401(k)s, this often requires a QDRO.

Factors That Affect How Retirement Accounts Are Split

Courts consider several factors when determining how to divide retirement savings fairly. These may include:

  • Length of the marriage
  • Each spouse’s income and future earning potential
  • Contributions made by each spouse (including homemaking or childrearing)
  • Other marital assets being divided

Colorado, for example, follows “equitable distribution” laws — meaning the division must be fair, not necessarily equal. This allows flexibility in negotiations. You might keep your entire retirement account in exchange for giving up other marital assets of similar value, such as the family home or investment accounts.

What About Early Withdrawals or Penalties?

When handled properly, splitting retirement funds in a divorce does not trigger taxes or penalties. However, if funds are withdrawn directly instead of being transferred through a QDRO or rollover, the IRS may treat it as an early withdrawal — resulting in income taxes and a 10% penalty.

That’s why it’s crucial to have your divorce attorney and financial advisor coordinate the transfer properly.

Can You Negotiate to Keep Your Retirement?

Yes — with careful planning and negotiation, it’s sometimes possible to keep your retirement accounts intact. This may involve:

  • Offering your spouse a larger share of other marital assets
  • Using mediation to reach a customized financial agreement
  • Demonstrating that part or all of your retirement funds are separate property

Every case is unique, so it’s important to consult an experienced divorce attorney who understands both family law and financial matters.

Protecting Your Financial Future

Retirement accounts are often one of the largest marital assets, so understanding how they’ll be handled is essential to protecting your financial future. The division of these accounts can have long-term effects on your ability to retire comfortably — so it’s not something to approach without professional guidance.

At Divorce Matters, our Colorado family law attorneys help clients navigate the complex financial issues that arise during divorce. We’ll work with you to protect your retirement assets, ensure a fair division of property, and help you plan for a secure future. If you need help with a custody or visitation matter, contact Divorce Matters today. Our experienced team is ready to help you protect your rights and your child’s best interests.

Prenuptial and Post-Nuptial Agreements: Protecting Your Future in Marriage

Last Updated on October 30, 2025 by Sheen Ancog

Marriage is not only a personal commitment but also a legal and financial partnership. While discussing finances before or during marriage might seem uncomfortable, having open conversations and clear agreements can actually strengthen your relationship. Prenuptial and post-nuptial agreements help couples establish financial boundaries, protect assets, and prevent disputes if the marriage ends in divorce or separation.

What Is a Prenuptial Agreement?

A prenuptial agreement (often called a prenup) is a legally binding contract created before marriage. It outlines how assets, debts, and property will be divided in the event of divorce, legal separation, or death.

Prenups are especially helpful for couples who:

  • Have significant assets, property, or business interests before marriage
  • Expect to receive inheritances
  • Have children from previous relationships
  • Want to clarify financial expectations and responsibilities

A well-drafted prenup can prevent misunderstandings and reduce conflict later. It’s not about mistrust—it’s about protecting both partners’ rights and ensuring transparency.

What Is a Post-Nuptial Agreement?

A post-nuptial agreement (or postnup) is similar to a prenup but is created after the couple is already married. It allows spouses to outline or update financial terms that may have changed since their wedding.

Couples may choose a postnup when:

  • One partner starts or expands a business
  • They receive a large inheritance or windfall
  • They want to clarify financial responsibilities after years of marriage
  • There have been significant lifestyle or financial changes

Like a prenup, a postnup must be fair, voluntary, and based on full financial disclosure to be enforceable.

Key Differences Between Prenuptial and Post-Nuptial Agreements

FeaturePrenuptial AgreementPost-Nuptial Agreement
TimingSigned before marriageSigned after marriage
PurposeDefines financial terms before marriage beginsAdjusts or adds financial terms after marriage
Common UsesProtecting premarital assets, business ownership, or inheritanceResponding to new financial developments or relationship changes
Legal EnforceabilityMust meet specific state requirementsMust demonstrate fairness and transparency at the time of signing

Both agreements can provide clarity, but postnups can be more challenging to enforce if one spouse claims unfair pressure or lack of consent—making proper legal guidance essential.

Why Couples Choose These Agreements

While many view these agreements as preparing for failure, they actually serve to protect both spouses and reduce conflict. Common benefits include:

  • Asset Protection: Ensures that premarital property, inheritances, and business interests remain secure.
  • Debt Division: Clarifies which debts belong to which spouse, preventing liability issues.
  • Financial Clarity: Sets expectations for spending, saving, and ownership.
  • Reduced Conflict: Prevents costly and emotional disputes if divorce occurs.
  • Peace of Mind: Offers transparency and fairness, promoting trust in the relationship.

In Colorado, courts uphold prenups and postnups if they are entered into voluntarily, with full disclosure and without coercion.

How to Create a Valid Agreement

To ensure a prenup or postnup holds up in court, certain legal standards must be met:

  1. Full Financial Disclosure: Both spouses must be honest about all assets, debts, and income.
  2. Voluntary Agreement: Neither party can be pressured or coerced.
  3. Fairness: The agreement must be reasonable at the time it was signed.
  4. Independent Legal Counsel: Each spouse should have their own attorney to review the document.
  5. Written and Signed: Verbal agreements are not enforceable in court.

Working with an experienced family law attorney ensures your agreement complies with Colorado law and accurately represents your wishes.

When to Consider Revising an Agreement

Life changes—so can your financial circumstances and priorities. It may be time to update your agreement if:

  • You acquire new assets or start a business
  • You move to a different state
  • You have children
  • Your financial situation changes dramatically

A post-nuptial amendment can help you update your terms to match your current situation and ensure continued protection.

How a Family Law Attorney Can Help

An attorney can:

  • Explain your rights and options under Colorado law
  • Help draft, review, or revise your agreement
  • Ensure fairness and enforceability
  • Represent your interests during negotiation

At Divorce Matters, our experienced family law attorneys help couples create fair, legally sound prenuptial and post-nuptial agreements. Whether you’re planning your marriage or redefining your financial relationship, we provide the guidance you need to protect your future.

Take the Next Step

If you’re considering a prenuptial or post-nuptial agreement in Colorado, don’t navigate it alone. Contact Divorce Matters today to schedule a confidential consultation with one of our skilled attorneys and learn how we can help you build a secure foundation for your marriage.