Your retirement savings are an important asset that you’ll want to preserve and protect. After all, you worked hard for these funds, but what happens if you get a divorce?
Divorce directly affects your financial security, and brings up worries about how you are going to afford retirement after your marriage ends. The experienced Ohio divorce attorneys at Kademenos, Wisehart, Hines, Dolyk & Wright Co. LPA are ready to protect your financial future and ensure you receive a fair settlement that protects your plans for retirement after divorce.
When Is A Retirement Account a Marital Asset?
If your name is on your retirement account it’s your personal property, right? In short, you would be wrong.
If you have a retirement account in your name and any of the money in the account accrued (was earned or added to the account) during the marriage, at least part of the value is considered a marital asset. And, all marital assets must be divided in a divorce in Ohio.
How Retirement Assets Are Divided
Ohio divorce law uses a property division principle called equitable distribution. This means that marital assets are divided in a way that is considered fair, but not necessarily 50/50. Retirement assets such as 401(k)s, pensions, and IRAs are divided using equitable distribution.
If you reach a settlement in your divorce, your attorney will work out a plan for how all retirement assets in the marriage (whether in your name or your spouse’s name) are divided. If you go to a trial, the judge will decide how the assets are divided.
Retirement Funds and Other Assets
When you get a divorce in Ohio, the court will not necessarily take each retirement account and split it in half and give half to each spouse. If you and your spouse each have retirement funds in your own names, they may balance each other out in value so no division is necessary. In this scenario, you would each keep your own accounts and there would be no need to split accounts.
It’s also possible to balance other assets against retirement assets. For example, you could keep your 401(k) and your spouse could keep your second home if they end up having comparable values.
Splitting Retirement Assets
The court will specify how the retirement assets are to be divided in the divorce judgment. While the court states how the funds will be shared, there are a few additional steps to actually move the funds. The way the money is moved or reassigned depends on the type of retirement fund involved.
An IRA is divided by rolling the money over to another account. The money in a 401(k) can also be rolled over to another account, but first your attorney must prepare a Qualified Domestic Relations Order (QDRO). This is a specialized document that is prepared according to the individual plan’s specifications. A pension plan is also divided using a QDRO which determines the amount of payments each spouse will receive at retirement.
Work with an Ohio Divorce Lawyer
The stakes are high when your divorce involves retirement plans. Because of this, it’s essential that you work with a respected attorney with considerable experience negotiating and litigating divorces involving all types of retirement assets. Kademenos, Wisehart, Hines, Dolyk & Wright Co. LPA has been assisting people in Ohio to protect themselves during divorce proceedings, and is ready to protect your retirement assets.