How do you handle division of retirement accounts in a divorce? Most Louisville and Jefferson County divorce cases these days include the division of retirement accounts such as 401(k)s, IRAs, or pension funds. These assets are eligible for division as marital property in Kentucky. The process for ensuring that these assets are properly accounted for and managed as part of the divorce requires extensive skill and expertise.
Each retirement plan has its own set of “orders” which the plan administrator will accept. It is one thing to have the judge order the division of a retirement account or asset, it is a totally different thing to present the retirement account, 401(k) administrator or pension fund manager with properly formatted and executed paperwork to ensure the process is completed accurately, timely and in accordance with the separation agreement or divorce order itself.
From a legal perspective retirement accounts are classified as “qualified” or “non-qualified.” Qualified accounts include most 401(k)s and pension plans. Non-Qualified plans include Individual Retirement Accounts or IRAs, deferred compensation, stock options, long-term incentives and supplemental pension plans.
Division of retirement accounts in a divorce for Qualified plans are usually managed by a Qualified Domestic Relations Order known as a QDRO. The QDRO must be approved by the plan administrator and properly prepared and executed in order to be accepted by the plan itself. Non-qualified plans are often placed into a trust to be held until such time as the funds can be distributed.
In high income situations these issues can be quite adversarial. Many employers attempt to conceal these incentives as an added perk for their key employee. We’ve seen entirely different retirement plans set up apart from the plan administered for most employees of a company in an attempt to conceal retirement assets.
The skilled divorce and family law attorneys at Dodd & Dodd have extensive experience in these cases. We often work with divorces that include business ownership as well as executives and high income wage earners. Both sides have unique interests in these situations and our seasoned lawyers protect our client’s interests while aggressively pursuing a retirement account division strategy that meets their goals.
If you have questions about the division of retirement accounts in a divorce or are considering a divorce in Louisville or anywhere Jefferson County which will involve retirement accounts, executive or high wage compensation, significant assets and/or a business ownership we invite you to contact us or call 502-584-1108 to schedule an appointment with one of our experienced attorneys.
