How will a Louisville divorce affect pension and retirement accounts? What do you need to know about these often large assets as you consider and work through a divorce?
Key Takeaways Regarding the Question of “How will a Louisville divorce affect pension and retirement accounts?”
- Any asset, including a pension or retirement plan to which a contribution was made during the course of the marriage, will be considered to be, at least in part, a marital asset, subject to property division in a divorce.
- This applies to Public Employees Retirement Systems (KERS), County Employees Retirement System (CERS), and the State Police Retirement System (SPRS), all managed by the KPPA (Kentucky Public Pensions Authority, as well as plans such as the Kentucky TRS (Teachers’ Retirement System).
- Orders from the Judge in your divorce are not enough to divide retirement plans and benefits. A Qualified Domestic Relations Order (QDRO) or other document will be required for each plan associated with the divorce.
Generally speaking, retirement and pension plans that began or to which either spouse contributed from the date of the marriage until the divorce is finalized are considered to be at least partially marital property in whole or in part. Marital property is to be divided “equitably” between the former spouses based upon Kentucky family law.
Do you have pension and retirement accounts such as KERS (public employees), CERS (County Employees Retirement System), SPRS (State Police Retirement System), or the Kentucky Teachers Retirement System (TRS), or retirement accounts such as a 401(k) or a 403(b)? If the retirement or pension account began during the course of the marriage, it will likely be characterized as a “marital asset” subject to an equitable property division. If any retirement or pension account was begun before the date of the marriage, the value of the account before the date of marriage and after the date of separation be classified as the “separate property” of the account holder.
One of the most expensive mistakes one can make during a Louisville divorce is to fail to manage the process of retirement account and pension division properly. When answering the question “how will a Louisville divorce affect pension and retirement accounts?” the complete answer must include an explanation of the legal document technical details required to accomplish the division of these accounts. Each pension or retirement account has its own preferred “Qualified Domestic Relations Order” (QDRO) or other written process requirements to properly divide accounts after the divorce. The language of these documents must be uniquely tailored to the plan and precisely structured to accomplish the division of the account. The failure to manage this process can literally result in the loss of hundreds of thousands of dollars.
The property division order of the Judge is not enough to actually accomplish the division of associated accounts, or to make sure each spouse receives access to the funds and benefits they are entitled to. Many people are simply unaware of these facts or fail to complete the QDRO process correctly, resulting in hundreds of thousands of dollars being unknowingly left on the table during their divorce.
How will a Louisville divorce affect pension and retirement accounts? You need an experienced and proven Louisville divorce and family law attorney from Dodd & Dodd on your side, to provide sound advice and counsel and protect your legal and financial interests. Make sure to ask your Dodd & Dodd divorce attorney about the tax impacts of important financial decisions, as all assets of equal value are not “equal” once they are sold or converted.
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.
