Divorce can be one of the hardest and ugliest things to deal with in your life. The emotional and familial turmoil that typically surrounds this process is often exacerbated by financial issues and the battle over division of assets. Retirement plans and pensions are often a key asset that is targeted by both spouses, especially when a nonworking spouse may be left without savings of any kind if he or she is unable to get anything from the former partner. Here’s what you can do to protect your retirement savings or rights to benefits if you face this unfortunate dilemma. (For more, see: Get Through Divorce with Your Finances Intact.)

Know the Rules

The first step in protecting your retirement assets is to know the rules that govern your plans, accounts and pension payments. Most plans and accounts have specific procedures that must be obeyed when it comes to dividing retirement assets, and failure to follow these instructions may lead to forfeiture of some or all of those assets — even if they were accorded to you in the divorce decree. (For more, see: Pitfalls of Getting Divorced After 50). For example, the Thrift Savings Plan, a defined-contribution plan for federal employees and members of the uniformed services, requires that the division of plan assets be clearly spelled out and referred to as the TSP balance directly in the divorce decree. A verbal agreement between the parting spouses will not suffice to process a rollover under the Qualified Domestic Relations Order (QDRO) rules. The decree itself must say something to the effect of “the spouse is entitled to X percent of the participant’s TSP balance” somewhere in the document or one of its appendices. If it does not, the spouse of the participant will receive nothing, regardless of any other agreement that was made. (For more, see: Is a TSP a Qualified Retirement Plan?)

Any debt that is owed inside a retirement plan also usually is considered to be a joint obligation. For example, if the participant spouse took out a $50,000 loan from his $200,000 401(k) plan, then a 50-50 split may be calculated on the remaining balance in the plan, unless the divorce decree specifically states that the loan must be repaid before the division. (For more, see: 401(k) Loans Pros and Cons.)

Pension Plans

Bureaucratically speaking, dividing IRAs and defined contribution plans is usually a relatively straightforward process. Either the divorce decree itself or a QDRO is used to move account balances from one spouse to the other in the form of a rollover. Dividing guaranteed pension payouts can be another matter in many cases. Although both types of retirement funds must usually be divivied up at the time of divorce by some form of court order, there are several key factors that enter into how monthly benefits are allocated between spouses. Any pension that was earned while the divorcing spouses were married is typically considered to be joint property in most states and therefore subject to some form of division in a divorce. That said, there are several ways that this current or future payout can be divided. (For more, see: 3 Life Events That Can Ruin Retirement Plans.)

Most pensions offer some form of survivor benefit, and in some cases the ex-nonworking spouse may simply opt to retain this benefit. In other cases, the actual monthly benefit is divided between the spouses and the survivor benefit may be waived, retained or transferred depending upon the divorce decree. In some cases, the nonworking spouse may come out ahead by…