13th Aug 2014

Many client’s, especially older individuals, coming to our office for advice on divorce, dissolution or family law issues have questions concerning their or their spouses retirement accounts.  Typically you hear, misinformation such as; You did not earn the money in the account so you are not entitled to any of it; Your name is not on the account so you are not entitled to any of the funds, or I am not able to receive my retirement at this time, so you cannot get a portion of the account.  None of these statements are true.

In Ohio, retirement accounts are treated like any other marital asset.  First you determine if the account is marital. An account is marital if it was earned during the marriage.  During the marriage is defined as the date of marriage to the date of separation, date of the filing of the divorce or the date of the property trial.  Sometimes a retirement account is wholly marital, sometimes it is wholly non-marital, and in many cases it is mixed.  A mixed asset is one that was partly earned during the marriage and partly earned either prior to the marriage or after separation.

After this first step, the marital portion of the retirement account, in most cases is divided evenly.  Retirement accounts usually fall into two main types, defined benefit plans (pensions), and 401K accounts.  A pension is a retirement account that pays a person a certain dollar amount per month till death.  A 401k account is a retirement account that is usually invested in the stock market (mutual funds).  401K accounts are easily valued as they have a cash value that can be determined at any specified date.  A pension is not so easily valued and practitioners and courts use experts (actuaries) to determine their value.

The Court uses a specific court order to divide retirement accounts. A Qualified Domestic Order (QDRO) is used to divide an individual’s retirement account. Two accounts are created by the QDRO, one for the participant and one for the alternate payee.  There are numerous rules and regulations including tax consequences  in drafting QDRO’s. Many times practitioners, including our office uses outside experts in the preparation and filing of QDRO’s.

Dividing retirement accounts is a complex area of family law.  Issues such as government and military retirement accounts have their own set of rules and vehicles for division. Valuing and offsetting retirement assets with other marital assets needs to be handled carefully.

If you live in Cincinnati, Ohio, Hamilton, Clermont or Warren Counties and have questions about how retirement accounts are divided in a divorce, dissolution or family law case, contact Andrew Ice Law, premier divorce attorney in Cincinnati, Ohio, Hamilton, Clermont or Warren County via www.AndrewIceLaw.com or 513.651.4227 for a complimentary consultation.


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