What happens to retirement plans in a divorce in Louisville? What happens to Social Security benefits in your divorce?
There are many different types of retirement plan vehicles including defined contribution plans, defined benefit plans, Individual Retirement Accounts (IRAs) as well as public employee or teachers retirement systems such as KPPA and KTRS. Defined contribution plans are a specific account with money in it which belongs to an employee. Either the employee or both the employer and the employee may contribute to the account. These accounts generally have an established value and include a 401(k) as well as a 403(b) or profit sharing plan.
A defined benefit plan is structured by an employer to provide retirement benefits in the future based upon various sets of criteria. Some of the factors may involve the earnings of the employee over the years as well as the years of service to the employer. The process to establish the present value of a defined benefit plan is much more complex and can require a professional expert’s opinion.
KPPA and KTRS are specific retirement vehicles for public employees and teachers in the State of Kentucky.
So, what happens to retirement plans in a divorce in Louisville and how are Social Security benefits handled? Generally speaking, if the retirement asset was established after the date of the marriage and prior to the date of separation it will be considered to be a marital asset and is subject to normal property division.
If one of the spouses had a retirement plan prior to the marriage it may be partially a separate asset of that spouse and partially a marital asset. The Court would need to establish the value of the account on the date of the marriage as well as on the date of separation, and divide amounts in the account(s) which accumulated during the course of the marriage.
Social security retirement benefits are always the separate property of the spouse who earns them. It is important to note that a spouse who remained home to raise children or manage the household may be eligible for Social Security benefits based on their spouse’s benefits. If the marriage has lasted 10 years or more and one of the spouses did not work or have enough Social Security credits to qualify for their own benefits, a spouse may be entitled to “spouse’s benefits” which could be up to half of the amount their spouse receives or will receive at full retirement age. This does not reduce the benefit of the actual Social Security recipient.
What happens to retirement plans in a divorce in Louisville depends upon the assets themselves, when they were acquired and how contributions were made. Generally speaking, retirement vehicles are quite often considered to be a marital asset and be divided during the process of property division.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.
