What happens to your retirement plan in a divorce in Louisville? How are present and future Social Security benefits going to be handled in your divorce?
3 Important Takeaways about What Happens to Your Retirement Plan in a Louisville Divorce:
- There are many forms of retirement, pension, profit-sharing, or defined contribution plans that must be properly valued and divided as part of a divorce in Kentucky.
- These assets are often some of the largest to be managed as part of the divorce process.
- Are the assets the separate property of one of the spouses, marital assets, or a blended or commingled asset? What is the proper valuation of each individual asset in your divorce?
There are far too many forms of pensions, retirement systems, retirement accounts, and other retirement plan vehicles, including those provided for Kentucky public employees or teachers through systems such as KPPA and KTRS to specifically address here. A defined contribution plan involves an account receiving deposits from both the employer and the employee’s retirement contributions. Typical forms of these accounts include a 403(b) or profit-sharing program, a 401(k), and other savings vehicles. Usually, the employer establishes the criteria under which an employee can build a retirement asset while serving their employer. It can be quite challenging to accurately assess the genuine valuation of a defined benefit plan in the context of a divorce. This may require analysis, reporting, and perhaps testimony from an accounting professional or expert witness.
KPPA and KTRS have been established in Kentucky to manage retirement accounts for public employees and teachers throughout the State of Kentucky.
So, what happens to your retirement vehicles, such as Social Security or a defined contribution plan, in a divorce in Louisville? These assets are often some of the largest to be managed as part of the divorce processThe first question is usually one of asset classification. When was the account opened (before or during the marriage), and were marital funds contributed during the course of the marriage? Your retirement vehicle(s) may, in whole or in part, be considered marital assets, subject to an equitable property division based upon Kentucky Family law.
However, if either or both of the former spouses had a retirement plan in place before the marriage, it may be partially classified as a marital asset and partially as a separate asset of that spouse. Once the assets have been properly analyzed and characterized, an accurate valuation of all commingled (blended) or marital assets must be established, so that these assets may be appropriately divided by the Court (or through an agreement between the former spouses).
Social Security-based benefits are usually retained as a separate asset of the individual to whom they are payable. In the case of a spouse who gave up their career to have a family or manage a household, Social Security retirement benefits may be available based on their former spouse’s unique scenario.
Several factors must be considered, including the length of the marriage and the potential “spouse’s benefits” available. Each situation is unique, which is why it is crucial to work with the experienced divorce and family law attorneys at Dodd & Dodd Attorneys.
What happens to your retirement plan in a divorce in Louisville? Each case is very fact-specific, and it is essential to work with experienced, proven divorce, family law, and tax attorneys at Dodd & Dodd. We will protect your interests and the security of your retirement.
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.
