Divorces can sometimes be unpleasant, but they can become particularly challenging when the couple has significant wealth that must be divided. In many cases, retirement assets are a particular area of contention between spouses in California who decide to end their marriages.

Many people invest heavily in their retirement funds. They do this for several reasons, including employer-matched contributions, favorable tax benefits and the desire to be financially independent in their senior years. As a result, retirement assets may represent a significant portion of a marital estate.

Factors that determine the division of retirement funds include the type of asset and the date when the couple separated. While some may assume that retirement funds are primarily an issue in a high-asset divorce, this isn’t always the case. For example, some people with moderate incomes may nonetheless have very large retirement savings while high-income people may have more modest nest eggs.

As with any divorce, it is important for both spouses to pay attention to the entire financial picture during the separation process. They should be aware of all marital assets and debts. This includes credit card and student loan debt, the value of the home and the balance remaining on the mortgage, investment accounts and all retirement plans, including 401(k)s, IRAs and pensions.

In some cases, the owner of a retirement account will want to keep it in its entirety and not have to share it during the property division stage of the divorce. A family law attorney representing the owner might attempt to negotiate an agreement with the other spouse that has the client giving up assets with a comparable value.