How will the division of retirement and pensions in a Louisville divorce be accomplished? Why is the division of retirement accounts, pension plans, 401(k) accounts, IRAs, Roth IRAs, SEP-IRAs, family owned business and privately funded plans, state employee and teacher’s retirement systems so contentious in a Louisville divorce?
Retirement accounts and pensions are quite often one of the largest asset(s) of a couple as well as the equity in their family home. Many people are shocked to learn their former spouse may be entitled to half of the balance in their retirement accounts, or at least some portion based upon the duration of the marriage. Each pension plan or retirement account has its own process and a very important form generally known as a Qualified Domestic Relations Order or QDRO. Every detail of the division of retirement and pensions in a Louisville divorce must be precisely managed and captured in a specific way based upon the requirements of each plan administrator.
It is not enough for the Judge in your case to issue an order for the account(s) to be divided. A QDRO is usually specifically tailored by each plan, so it’s not a “one document will suffice” kind of application. The plan administrator is looking for specific information and instructions which must have exact wording and precise calculations. Generally speaking, the QDRO provides direction on how the account is to be divided, the identity of each party and the amount allocated to each. While some retirement or pension plans do not specifically require a QDRO, they will require the completion of their own forms and specific orders from the Court. Any error or omission on these forms can literally cost one of the parties tens to hundreds of thousands of dollars.
Generally speaking, retirement and pension plans are considered to be (at least in part) marital property in Kentucky. If the retirement plan was begun after the date of the marriage the plan will likely be entirely a marital asset. If the retirement or pension plan was begun prior to the date of the marriage, there can be a legally and financially complex challenge to determine which portion of the account(s) would be the separate property of the named spouse and what portion would be considered to be a marital asset.
The division of retirement and pensions in a Louisville divorce is one of the most important issues to make sure is done correctly. Most of our clients have a substantial financial interest at stake, as well as security in their retirement years. The experienced Dodd & Dodd family attorneys have served the Louisville area for decades. Ask about not only how to protect your interests, but the tax impact on the decisions you make during the process of your divorce. All of these decisions will combine to establish a new path, new opportunities for the future, while protecting the things that matter to you most.
We invite you to review the strong recommendations of our former clients and the legal industry and contact Dodd & Dodd or call 502-584-1108 to schedule an appointment with one of our attorneys.
