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Divorce and Family Law Office of Joanne Kleiner

Divorce Lawyer Joanne Kleiner

Assets

Jun 02, 2025

How Retirement Accounts Are Divided During Divorce

When couples divorce in Pennsylvania, one of the most important and complicated parts of the process involves the division of marital property. Among the assets to be divided, retirement accounts—including pensions, 401(k)s, and IRAs—often represent a significant portion of a couple’s total financial worth. Understanding how these accounts are treated during equitable distribution is critical to protecting your financial future.

At the Law Office of Joanne E. Kleiner, we help clients in Montgomery, Bucks, and Philadelphia counties navigate the complexities of retirement asset division during divorce. With over 35 years of family law experience, we are committed to helping clients make informed decisions about their future financial security.

Retirement Accounts as Marital Property

In Pennsylvania, retirement accounts are generally considered marital property if they were earned or contributed to during the marriage. It does not matter whose name is on the account. If contributions were made or the account increased in value while the couple was married, that portion is subject to equitable distribution.

Marital property includes:

  • Contributions made during the marriage
  • Growth in value during the marriage, including investment returns
  • Employer contributions made during the marriage

Separate property, such as retirement savings accumulated before the marriage, may not be divided. However, the increase in value of separate property during the marriage can still be considered marital property.

Equitable Distribution in Pennsylvania

Pennsylvania follows the rule of equitable distribution, meaning that marital assets are divided fairly, but not necessarily equally. The court considers a variety of factors, including:

  • The length of the marriage
  • Each spouse’s income and earning capacity
  • Contributions to the marital estate (both financial and non-financial)
  • The standard of living established during the marriage
  • Each spouse’s needs moving forward
  • Any pre- or postnuptial agreements between the spouses

When dividing retirement accounts, the goal is to ensure that both parties leave the marriage with a fair share of the financial assets accumulated during the marriage.

Dividing Pensions

Pensions are a type of defined benefit retirement plan that promises a specific monthly benefit upon retirement. Pensions earned during the marriage are marital property and subject to division.

Dividing a pension can be complex because it may not have a current cash value. Instead, the future payout must be valued based on factors such as:

  • The employee’s years of service
  • Salary at retirement
  • Pension plan terms

The portion of the pension earned during the marriage must be calculated separately from any benefits earned before marriage or after separation. In many cases, the division is achieved through a Qualified Domestic Relations Order (QDRO), which directs the pension administrator to pay a portion of the benefits directly to the former spouse.

Dividing 401(k) Accounts

401(k) plans are employer-sponsored retirement accounts that allow employees to contribute pre-tax earnings toward retirement savings, often with employer matching contributions. Contributions made and investment gains earned during the marriage are marital property and can be divided between the spouses.

Dividing a 401(k) also typically requires a QDRO to avoid early withdrawal penalties and taxes. A properly drafted QDRO ensures that each party receives their share of the account without triggering unintended tax consequences.

Options for dividing a 401(k) may include:

  • Splitting the account at the time of divorce
  • Offsetting the value with other assets (e.g., one spouse keeps the 401(k), and the other receives more equity in the marital home)

A financial advisor or actuary can assist in valuing the account and determining the best method of division based on the couple’s broader financial picture.

Dividing IRAs

Individual Retirement Accounts (IRAs) are personal retirement savings accounts that may be either traditional (tax-deferred) or Roth (after-tax contributions). Like 401(k)s and pensions, the portion of an IRA accumulated during the marriage is considered marital property.

Unlike 401(k) accounts and pensions, dividing an IRA does not require a QDRO. Instead, IRAs can be divided using a transfer incident to divorce, which allows the transfer of funds between spouses without taxes or penalties if completed properly.

It is important to ensure that:

  • The division is clearly specified in the divorce decree or separation agreement
  • The funds are transferred directly from one IRA to another (not withdrawn and re-contributed)

Failure to follow the correct procedures can result in significant tax liabilities for the parties involved.

Tax Implications of Retirement Account Division

Dividing retirement accounts during divorce carries potential tax consequences, depending on the type of account and the method of division.

For example:

  • Distributions from traditional 401(k) accounts and traditional IRAs are taxable as ordinary income when withdrawn.
  • Roth IRAs typically allow for tax-free withdrawals, provided certain conditions are met.
  • Early withdrawals made outside the divorce process can trigger a 10% penalty in addition to income taxes.

Properly using a QDRO for employer-sponsored plans and correctly handling IRA transfers is essential to minimize negative tax effects.

Common Mistakes to Avoid

Some of the most common mistakes people make when dividing retirement assets include:

  • Failing to account for taxes when valuing retirement benefits
  • Not obtaining a QDRO when needed
  • Overlooking the division of future pension benefits
  • Misunderstanding the terms of retirement plans
  • Agreeing to an unequal division without fully understanding the consequences

Having experienced legal counsel ensures that all retirement assets are properly identified, valued, and divided according to Pennsylvania law.

How the Law Office of Joanne E. Kleiner Can Help

At the Law Office of Joanne E. Kleiner, we understand that dividing retirement assets is about more than numbers—it is about protecting your financial future. We help clients accurately identify marital portions of retirement accounts, negotiate fair divisions, and ensure compliance with complex legal and financial requirements.

Our firm provides experienced, personalized representation to help you:

  • Value and classify retirement assets correctly
  • Navigate the QDRO and IRA transfer process
  • Minimize tax consequences
  • Plan for long-term financial security post-divorce

If you are considering divorce or currently going through one, and you have questions about how your retirement accounts may be affected, contact the Law Office of Joanne E. Kleiner at 215-886-1266 to schedule a confidential consultation. Secure your future by making informed decisions today.

Jul 07

Financial Considerations in an Amicable Divorce

Divorce is a challenging life event, but it doesn’t always have to be adversarial and ugly. In an amicable divorce, couples work together to end their marriage in a respectful way, focusing on good communication and understanding. One important aspect of an amicable divorce is dealing with the financial side of things.

Before starting the divorce process, it’s important for both of you to understand your financial situation. This means having a comprehensive understanding of your assets, liabilities, income, and expenses. Take the time to gather and organize all the relevant financial documents, like bank statements, tax returns, and property ownership documents. Having a clear picture of your finances will help you make smart decisions and work out a fair settlement.

Female hand shaking male hand.

Assessing Assets and Liabilities

In an amicable divorce, it’s necessary to figure out both what you currently own and what you owe. This means looking at the properties, investments, retirement accounts, and any other assets acquired during your marriage. It’s also important to think about the debts you have, such as loans or credit card balances. By taking a good look at your assets and debts, you can make sure everything is divided fairly and equitably between the two of you.

Deciding how to divide your assets is a big part of a divorce. The division of marital property is often a significant consideration during divorce proceedings. Different jurisdictions adopt varying approaches, such as equitable distribution or community property principles. Equitable distribution aims to divide assets fairly based on various factors, including each party’s contributions to the marriage, earning capacity, and future financial needs. Through negotiation and compromise, couples can achieve a fair and mutually beneficial division of their shared assets.

Family Financial Planning

Spousal support, commonly known as alimony, is another financial consideration in divorce.  This is when one person pays the other person to help them financially after the divorce. The amount of support depends on things like how much money each person makes, how long the marriage lasted, and each person’s needs. Talking openly about spousal support and thinking about the future can help you come up with a fair agreement.

When children are involved, the financial well-being of the children becomes a primary concern. Child support ensures that both parents continue to provide financial support for their children’s upbringing and welfare. During an amicable divorce, it is essential to determine child custody arrangements that prioritize the best interests of the children. Open discussions and cooperation are crucial in creating a child support plan that is fair and sustainable for both parties.

Divorce can have significant tax implications, and understanding them is vital for effective financial planning. Various aspects, such as the treatment of alimony, child support, and property transfers, can impact tax obligations. Seeking professional advice from a tax specialist or accountant will help you navigate these complexities and make informed decisions that align with your financial goals.

Planning for the Future

Considering the long-term financial implications of the divorce is essential for securing your financial future. Setting realistic goals and developing a post-divorce financial plan will help you move forward with confidence. Seeking the guidance of financial planners or advisors can provide valuable insights into managing your finances, investments, and retirement plans.

In an amicable divorce, addressing financial considerations is crucial for a smooth transition and fair outcomes. By understanding your financial situation, dividing your assets and debts fairly, and considering things like spousal support and child support, you can make the financial side of divorce a little easier. With the help of professionals and by planning for the future, you can set yourself up for a stable financial future after the divorce.

Amicable divorce ultimately requires commitment, compromise, and patience from both parties, but is an excellent option for Pennsylvania couples who are motivated to part ways peacefully without the need for court intervention. If you’re interested in this type of divorce, you might want to seek the assistance of a qualified divorce lawyer who can help you determine if it’s the right choice for you. Contact the Law Office of Joanne Kleiner at 215-886-1266 to speak with an attorney at our Jenkintown office about your legal rights and options.

Mar 07

The Key Differences Between Separate and Marital Property

How to Classify an Asset for Property Division Purposes

You may believe that you are at risk of losing half your belongings if you leave your spouse. However, this isn’t necessarily the case. Instead, you generally only risk losing a portion of the assets held inside of the marital estate.

What Is the Marital Estate?

Generally speaking, any assets that are acquired during a marriage are considered to be part of the marital estate. This may be true even if only one person’s name is on the deed or title to the asset. For instance, if you buy a home with your spouse, you generally have an ownership interest in that home even if it is held in your spouse’s name.

It’s also worth noting that price appreciation that occurs in a separate asset after marriage becomes official may be part of the marital estate. For instance, let’s say that you own a home that is worth $100,000 on the date of your wedding. Let’s also say that the home is worth $200,000 when your divorce becomes official.

Your spouse will likely be entitled to a portion of the $100,000 in price appreciation that took place while you were married to them. It’s worth noting that they would be responsible for paying capital gains taxes on any profits that they received from selling a joint asset obtained in a divorce settlement.

What Is Commingling?

Commingling can occur in several different ways. For example, if your spouse deposits money into your personal bank account, that asset may now be considered joint property. The same may be true if your spouse used their money to make repairs to your home, car or other property. Separate assets may become joint assets because you failed to keep accurate records of when they were acquired and who paid to obtain or maintain them.

Tips for Retaining Control of Property After Getting Married

The use of a prenuptial agreement may make it easier to exempt property from being distributed to your spouse in a divorce settlement. Such an agreement may stipulate that your business, home or other property is to be classified as separate property. A divorce lawyer may be able to help you draft a prenuptial agreement that is likely to hold up under scrutiny.

If you aren’t able to create such a contract before your wedding takes place, you can draft a postnuptial agreement after your marriage becomes official. Regardless of when this type of agreement is executed, it’s important to allow your spouse to review it with their own attorney. This may help to ensure that the document won’t be invalidated based on a claim that it was signed under duress.

Putting assets into a trust may also be an effective way to retain control of them after a divorce. In most cases, property held in a trust is considered to be kept outside of the marital estate. Of course, your spouse may challenge the validity of the trust, and it’s possible that a judge will nullify it in the event that the document is not structured properly.

Certain Assets Won’t Automatically Become Part of the Marital Estate

If you received an inheritance while you were married, it remains a part of your separate estate. The same is true of anything that you received as a gift from your spouse, a friend or a family member. Of course, these items can become joint property if they are commingled, which is why it may be best to keep them in a separate account or place them in a trust.

If you need the assistance of a divorce lawyer, you’re encouraged to contact the Law Office of Joanne Kleiner at your earliest convenience. You can call our Jenkintown office by dialing (215) 886-1266, or you can fill out and submit the contact form located on our website.

Oct 18

How to Split the Family Home in a Divorce Without Going to Court

Ways to Fairly Divide Your Home With Your Ex

Since a home is most people’s largest asset, it’s no surprise that property disputes are one of the biggest reasons for fights during divorce proceedings. If you are not interested in a court battle, it is a good idea to be flexible and talk about your options. Here are some ideas for how you and your estranged spouse can fairly divide your family home.

Exchanging the House for Other Assets

The first thing to recognize is that it’s not technically necessary to split the house. During a divorce, you are splitting all the assets you and your partner contributed to. So if one person really loves the house and the other person doesn’t care at all, it may be worthwhile to just let that person have the house. To keep asset division fair, your divorce lawyer might suggest that the other spouse gets things like a bigger portion of a retirement fund, more of the joint savings account, or possession of other property. This solution works best in cases where couples have a lot of assets, so a house is just one of the many things to negotiate. It may not be possible if all your funds are tied up in the value of your home.

One Partner Buying Out the Other’s Share

This option is popular in a divorce where you want to split all assets down the middle, but one partner wants the house more than the other does. On the surface, it’s a simple thing that involves one person giving away some of their personal funds, while the other person gets full control of the house. The tricky part is determining the value of the house. Some people may want to get half of the full market value of the house. Others may be fine just getting half of the original cost of the house or half of what they both paid into the house over the years. When negotiating this, it may be necessary for the seller to decide whether their goal is maximum profit or just recouping a little costs and escaping the responsibilities of home ownership.

Continuing to Co-Own the House

Sometimes, either partner selling their share just doesn’t work. Often, people want to wait to sell until market conditions improve or until their kids move out of the home. Keeping your finances entangled can be a little tricky. It’s a good idea to get help from a divorce mediation practitioner who can assist you with navigating all the emotions and financial disagreements involved in co-owning a house after divorce. You will need to be able to handle things like splitting the cost of repairs and agreeing on who gets to spend time in the house. Keep in mind that you will each technically be responsible for the full cost of the mortgage, so it can make it hard to get credit for things like car purchases.

Selling the House and Splitting the Profits

Selling the house, subtracting all costs, and then dividing the profits into two equal shares is a fairly simple way of dealing with the conflict. Though actually preparing the house and selling it takes time, this agreement reduces arguments and gives each person money to start their new life. This is actually the solution the courts usually recommend if the two spouses cannot agree on who gets the house. However, going through the court takes extra time, and then you would have a rushed sale that might not net the highest cost. Therefore, agreeing to this solution can give you a little more time to find a favorable sale.

As you can see, there are a lot of creative solutions to the question of who gets the house. Having a divorce lawyer who can help you negotiate a clear and satisfying agreement can take a lot of the stress out of dividing assets in a divorce. The Law Office of Joanne Kleiner is here to assist people living in Montgomery, Bucks, and Philadelphia counties with their divorces. Call 215-886-1266 or fill out our contact form to learn more about how we might be able to help you.

Jun 18

Can You Get Some of Your Ex’s Pension During a Divorce?

Am I Entitled to My Ex-spouse’s Pension?

Roughly 56% of Americans include a pension or other retirement savings plan as part of their financial assets. Dividing up these sorts of assets in a divorce can be tricky. Whether or not you get part of your ex’s pension will depend on a few factors.

Pensions Are a Joint Asset

Even if your spouse was the only one contributing to the pension, part of it might be your property. Your divorce lawyer can argue for you getting a share of the pension because it’s a joint asset. Over the course of the marriage, you and your spouse’s contributions both went into things like producing children, obtaining a career, and getting home goods. Therefore, any funds that you or your partner got during the marriage are called joint marital property. In a divorce, these joint assets are split up. Depending on the way that you either choose to divide assets or a court issues an order, you can get some of a pension.

You Might Not Get Half of the Pension

Pensions are treated just like any other asset division in Pennsylvania. This means that they are split based on what is equitable and fair. Keep in mind that this doesn’t necessarily mean you automatically get half. Instead, the judge will split any pensions based on factors such as:

  • Whether you contributed to the home non-financially, such as helping with child care or cooking
  • How long you have been married
  • How much money you and your spouse each have
  • Your age, health, and ability to work at a job
  • Whether you’ll be a custodial parent or not
  • Your contributions to the pension or other marital property

Additionally, you might have the option of choosing to forgo your share of the pension in exchange for something else. For example, if you want to keep a car, you and your divorce attorney might offer to relinquish your right to the pension and get the vehicle instead.

Reasons That You Might Not Be Entitled to Some of the Pension

In most cases, a pension is part of joint marital property that needs to be considered during asset division. However, there are a few factors that can keep a pension from being a joint asset. In these cases, the answer to who gets the pension in a divorce will be your ex. You won’t be able to ask for part of it or use it while negotiating for certain property.

The most common reason that you won’t get part of the pension is just that your partner earned it before you were married. When your spouse brings a pension into your marriage, it is their personal property that they get to take when they leave. If they started the pension before your marriage but kept contributing after, you’re only entitled to the portion of the pension accrued after your marriage.

Another reason you might not be entitled to a pension is if you signed a prenuptial agreement. Though judges can throw out prenups for certain reasons, this doesn’t happen often. Typically, if you agreed you wouldn’t take any of your ex’s pension, you can’t. A final reason that you might not get their pension is the type of the account. Some pensions, such as those through the military, may follow a separate set of rules. These can potentially bar the pension owner from splitting the account with an ex. If the owner cannot transfer the pension to anyone else, you might not get any money from it.

Ultimately, most couples who divorce will end up splitting pensions or substituting other assets. However, this sort of asset division can be tricky, so it’s a good idea to discuss your unique situation with a divorce lawyer. At the Law Office of Joanne Kleiner, we take pride in helping people achieve satisfactory divorce outcomes. Our team provides the representation you need during this challenging transition. Call 215-886-1266 or fill out our contact form to schedule a consultation today at our Jenkintown office.