Retirement Account Division In Ohio Divorce Court
Will I Keep My Retirement Account Savings And Benefits If I Divorce My Spouse?
Going through a divorce can be complicated and stressful. Common sense thinking oftentimes does not mesh with Ohio divorce laws. Division of retirement accounts may fall into that category.
Some people mistakenly think that retirement savings are separate property in a divorce. If they are the owner of an employer-sponsored pension plan or in investment accounts like 401(k)s, they may believe that since they earned the benefit that they get to keep it even in a divorce. That is likely WRONG. If any was earned during the marriage, that portion is “marital property” and subject to the Court’s equitable division just like a joint bank account. In other words, just because you earned the retirement benefit, you do not get to keep it in a divorce . Any amounts accrued during your marriage will belong to both spouses.
How Will the Division of Retirement Benefits Alter Your Retirement Plans?
The Supreme Court of Ohio has held that all retirement benefits that were earned during the marriage are part of the “divorce estate”. It doesn’t matter what kind of retirement account – this includes plans offered by employers, Federal public plans (like the Civil Service Retirement System), State plans (like the State Teachers Retirement System), or private plans like a 401(k) and IRA’s.
The older you are and closer to retirement, the more important this issue may be. You and your spouse have likely planned to save money to retire together. How will the division of retirement benefits in a divorce perhaps alter your retirement plans?
Ohio courts focus on fair and equitable asset division
The date your acquired these assets is more important than whose name they are in. If they were earned prior to marriage they likely will be determined to be the “separate property” of the individual who brought the asset into the marriage.
But What About Accounts that are Partially Earned During the Marriage?
Obtaining complete statements of the retirement account vales at certain dates will likely be necessary:
- What was the value on the date of marriage?
- What was the value on the date of separation?
- What was the value on the date of the filing of the divorce?
- What is the present value of the account?
Court Orders Avoid Financial Penalties
To transfer an interest in a State plan, a Division of Property Order form (DOPO) must be approved by the divorce court. To transfer an interest in a Federal “qualified” plan, a Qualified Domestic Relations Order (QDRO) must be approved by the divorce court and the plan administrator. IRAs that are not qualified plans can usually be transferred by a simple letter of instruction.
The manager for your fund or account will then create a new account for your spouse and deposit the appropriate percentage or amount into the new account based upon the precise language in the Court Order. The good news is that obtaining the appropriate Court Order will eliminate taxes or financial penalties from that asset division!
How an Attorney Can Help With Retirement Account Issues
The issues attendant to the division/distribution of retirement benefits is very complicated. Obtaining the advice of an experienced divorce lawyer is strongly suggested. An attorney can also recommend an expert, if necessary, to determine the value of the marital portion of a benefit. Trying to use an online form to accomplish this is fraught with huge problems which can cost lots of lost money.
Questions about retirement account division in a divorce? Schedule An Appointment Today!
At Holzfaster, Cecil, McKnight & Mues, located in Dayton, Ohio, top-notch family law and divorce representation is provided by our experienced divorce lawyers! To learn more, go to our website at www.hcmmlaw.com. Or, please contact us at (937) 293-2141 to schedule an appointment for an initial consultation which can be conducted either by phone, Zoom or in person.
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Attorney Robert “Chip” Mues has been focusing his legal practice throughout Southwest Ohio primarily in divorce and family law matters since 1978. Chip is passionate about family law and has proudly published the Ohio Family Law Blog since 2007. In addition, he is the managing partner of Holzfaster, Cecil, McKnight & Mues. To learn more about him or the law firm, visit the firm’s website at www.hcmmlaw.com. Appointments are available in person, over the phone or by Zoom. Call us at 937 293-2141.
