Although many people enjoy their jobs and find meaning in going to work each day, for most a career is simply a path to retirement and financial freedom. Arizona residents hope that if they work hard and save some of what they earn that eventually they will have enough to live off of and to carry them through the ends of the lives. While retirement savings do benefit many people, those savings may be impacted by a divorce.
As readers of this family blog may remember, Arizona is a community property state. This means that the wealth and assets that partners in a marital couple acquire after they wed are considered marital and therefore equally divisible upon divorce. So, for example, if a person saves $1 million in retirement accounts after they are married, that sum may be cut in half and reduced to $500,000 for them if their union ends in divorce.
An important note, however, is that any retirement accounts that were funded prior to a marriage are generally not divided under the community property laws of the state. The property that individuals acquire before they wed will generally retain its separate status and stay under the ownership of the individual who earned it.
A divorce can be a difficult process in terms of the parties' emotions and finances. It can cause a person's retirement plans to change if their wealth will be significantly altered due to the property division laws of the state. To learn more about how retirement assets could be diminished by a pending Arizona divorce, readers may want to get more information about family law and divorce.