The answer is usually yes, provided that the parties have been married for 10 years or more and the retirement funds were accumulated during the marriage. The amount a spouse can receive from the other is limited to 50% of what was accrued during the marriage.
Code of Alabama (1975) § 30-2-51(b) states:
(b) The judge, at his or her discretion, may include in the estate of either spouse the present value of any future or current retirement benefits, that a spouse may have a vested interest in or may be receiving on the date the action for divorce is filed, provided that the following conditions are met:
(1) The parties have been married for a period of 10 years during which the retirement was being accumulated.
(2) The court shall not include in the estate the value of any retirement benefits acquired prior to the marriage including any interest or appreciation of the benefits.
(3) The total amount of the retirement benefits payable to the non-covered spouse shall not exceed 50 percent of the retirement benefits that may be considered by the court.
Getting such a division is not as easy as it sounds. Proving “present value” of the retirement benefits under the Alabama Rules of Evidence before a Court can be tricky. This is especially true when some but not all of the retirement was earned prior to the marriage.
Additionally, certain pension funds (including the Retirement Systems of Alabama) refuse to divide their benefits. Before any settlement is reached or any trial takes place, an attorney will need to ascertain whether or not a retirement fund can be divided even if a Court orders it. If a fund will not cooperate, then a party needs to let the Court know and proceed with alternative ways to obtain a fair property division (i.e. alimony, land, etc.) If the retirement fund can be divided, the Court will enter a division Order that depends on the type of fund. A Qualified Domestic Relations Order (QDRO) is the most frequent type of division order seen. QDROs are recognized under the U.S. Tax Code to prevent early taxes and penalties when retirement funds (especially a 401(k) are paid out early into the new/current retirement account of the ex-spouse.
Retirement division can be one of the most important issues in a divorce, and it is very important that you get an experience domestic relations attorney to help you successfully navigate issues this this. Brad Green and Brett King have helped hundreds of clients through retirement division during a divorce. You can call either our Birmingham office at 205.937.3687 or our Blount County office at 205.683.0660.