Dividing retirement assets in a divorce in the state of Ohio can come with some challenges. To ensure the best possible outcome, you need to understand how the Ohio divorce property division works and what you are entitled to.
Are you wondering what to expect when it comes to dividing retirement assets in a divorce? If so, check out this article, where we will be discussing divorce laws in the state of Ohio and how this impacts equitable distribution.
Ohio’s Equitable Distribution Rule
When it comes to Ohio divorce property division, the property is divided into two categories: marital property and separate property. Marital property is anything that has been acquired during the marriage, making it the property of both spouses. On the other hand, separate property is anything that was acquired before the marriage, making it the property of one spouse.
According to Ohio’s equitable distribution rule, all of the assets accumulated during the marriage is marital property. This applies no matter which spouse puts in the most effort to obtain that property. The only exception to this rule is if both parties signed a premarital agreement, which would outline different distribution rules.
So, when you get a divorce in Ohio, you can expect all of the marital property to be divided equally. One situation that would result in the court dividing assets unequally is if there has been financial misconduct on the part of one of the spouses.
Types of Retirement Accounts and How They Are Handled
If you are worried about how things will be divided in an Ohio divorce, you also need to consider different types of retirement accounts and 401Ks in a divorce. Different types of accounts have different rules, which can impact how they are divided in a divorce.
Because this process can be quite complex, you need to hire a divorce attorney in Ohio. An Ohio divorce lawyer will understand the complexities of retirement and pension division in divorce cases and can help you proceed with confidence.
Understanding Qualified Domestic Relations Orders
The majority of retirement accounts that people have will be covered by ERISA. When this is the case, a qualified domestic relations order or QDRO is required to divide the account.
The QDRO process requires either a divorce attorney or a professional QDRO preparer to draft an order that specifies how and when the account will be divided and paid, along with other details. Both spouses will need to approve the agreement as well as a retirement plan administrator before it is sent to a judge to sign.
A QDRO is usually required for 401K, IRA, and pension retirement plans. The entire process of drafting the order and getting it approved can also take several months, depending on the circumstances.
The tax consequences for their retirement assets also need to be taken into consideration before any withdrawals are made.
This is just one of the many reasons why it is a necessity to hire an Ohio divorce lawyer. They will play a critical role in preparing in the QDRO, evaluating it, and ensuring everything is done legally and goes as smoothly as possible.
Common Challenges in Dividing Retirement Assets
Each divorce case is incredibly unique, which could result in you running into a variety of unique issues. How complex this process is will usually be dependent on how your relationship is with your spouse. If there is a significant amount of animosity, this can create a great deal of challenges when it comes to dividing retirement assets.
Here are some of the most common challenges spouses face when dividing retirement assets in a divorce in Ohio:
- Hidden or undervalued assets: It is impossible to fairly divide the marital assets when your spouse is not being upfront. A common challenge in divorce cases is when one spouse is hiding or undervaluing assets in the hopes of getting more than their fair share.
- Negotiating a fair split: Many aspects of an Ohio divorce require both spouses to communicate to some degree. When the two of you cannot communicate amicably, this can make it very difficult to negotiate a fair split, significantly delaying having the divorce finalized.
- Document approval: Whether you are using a qualified domestic relations order or an Ohio division of property order, these documents need to be crafted thoroughly. If there are any issues with the orders, this can result in them not being approved, which can delay the process of splitting your retirement accounts.
- Proving separate property: If you are certain that one of your retirement accounts is separate property, not marital property, you will need to prove this. Providing enough proof can be quite difficult, especially if your spouse believes it is marital property.
FAQ Section
Will my spouse automatically get half of my retirement savings?
In most Ohio divorce cases, retirement accounts will be divided in half due to Ohio’s equitable distribution rule. Only in rare cases will the division not be equal.
How is a pension divided in an Ohio divorce?
Pension division in a divorce in Ohio will need to be done with either a QDRO or a division of property order, depending on the type of pension.
What happens if we sign a prenup?
A prenup is usually used to protect one of the spouses assets in the case of a divorce. So, if a couple has signed a prenup, this may result in one spouse not getting an equal share, which includes when retirement accounts are divided.
Are retirement accounts considered marital property?
Most retirement accounts will be considered marital property unless you can prove without a doubt that you had an existing retirement fund before your marriage.
Hire a Divorce Attorney in Ohio
If you are getting a divorce in Ohio, one of the very first things you need to do is seek the help of a divorce attorney. Richard P. Arthur, Attorney at Law, has extensive experience representing divorce cases in Ohio and can help you understand the complexities of dividing retirement assets. To move forward with your divorce case, contact us today at 937-254-3738 for a free consultation.