How will a 401k be handled in a Louisville divorce? Retirement assets such as a 401k are considered in the same manner as “marital property” and marital contributions are usually fairly or equitably divided between the parties. Is a retirement asset the separate property of the owner, or is it a marital asset and subject to division as part of the marital property in your divorce?
If the 401k or retirement asset was established during the course of the marriage it is almost always going to be considered to be a marital asset and subject to division like all other marital property.
If you entered the marriage with a substantial balance in your 401k the “marital property” value of the 401k itself can actually be quite legally complex. There will be an analysis of the marital funds or income during the marriage which was contributed to the account. In cases of mismanagement or questionable or over-aggressive investment there may be legal issues which are greater than the simple difference in balance between the date of marriage and the divorce.
How is the division of a 401k handled in a Louisville divorce? There is actually a very important legal document that divides a retirement account such as a 401k after a divorce. The judge in the case may very well order a retirement account to be equitably divided between the parties. However, this order on its own is not enough to accomplish the actual division of a retirement account. A “Qualified Domestic Relations Order” or QDRO is going to be required by the administrator of the 401k plan.
The QDRO will usually follow a specific template or structure established by the plan itself and must be approved before an account can be divided. There are questions of whether each party will maintain their separate 401k accounts or if one party intends to liquidate the asset resulting in a substantial taxable event.
This is why it is important to work with the experienced divorce, family law and tax attorneys at Dodd & Dodd. We will protect your rights and ensure all QDRO paperwork is structured correctly for the plan administrator as well as the Court. We will help you to understand the tax implications of any decision in your divorce including the division of a retirement account or pension.
How is a 401k handled in a Louisville divorce and what can you do to protect your interests? Our experienced divorce and family law attorneys provide insight and effective strategies for protecting important assets in your divorce. We invite you to review the strong recommendations of our clients and contact us or call 502-584-1108 to schedule an appointment with one of our attorneys.
