The beginning of a new year often leads to financial planning, new goals as well as considerations of major life changes. January is one of the highest months for divorce filings in Louisville. One of the most common issues is the division of retirement accounts in a Louisville divorce.
Pensions, 401(k)s, and other retirement accounts are often some of the assets with the highest value during property division. It is important to realize that in most cases retirement assets are going to be handled much like any other marital property – to be equally divided between the former spouses.
However, the division of retirement accounts in a Louisville divorce requires specialized paperwork and attention to detail. For example, 401(k) accounts and other retirement vehicles require a Qualified Domestic Relations Order or QDRO in order to implement the ultimate property division orders of the Court.
Each plan generally has it’s own form of a QDRO, and/or specific verbiage which must be meticulously crafted in order to be accepted by the plan. This is not some form you can download from a website or modify yourself. One mistake and you could cost yourself literally hundreds of thousands of dollars.
In grey divorce cases (where both parties are over the age of 50) some may be tempted to borrow against or seek distributions from their retirement plans in order to pay for the divorce. If you are considering a distribution or load and you are 59 years of age or younger you should seek the counsel of a tax attorney to learn about the potential for early distribution taxes and penalties. In some cases the penalties could be several or tens of thousands of dollars.
You may want to transfer funds between qualified retirement vehicles or you may need to simply leave things as they are. One wrong decision could cost you tens or hundreds of thousands of dollars. This is why it is important to work with the Divorce and family law attorneys at Dodd & Dodd. We provide sound counsel and advice on the division of retirement accounts in a Louisville divorce as well as other issues such as business ownership interests or child custody and parenting time.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.