It can be a challenge for divorcing couples to figure out how to divide assets and property and handle child custody. Determining how to fairly divide retirement assets can add another layer of challenge to the divorce process in Ohio. For many couples, their retirement savings represent the largest chunk of money that they have. If they are not careful, they could find themselves paying a hefty price as they are forced to pay penalties and additional taxes. Or they may see a substantial amount of money go to their ex-spouse.
Working with an attorney who has expertise in handling these situations is a key part of having an equitable outcome. However, financial experts advise divorcing couples to be familiar with what they have in their retirement fund. It's easy to think that an attorney will not miss anything, but the truth is that the divorcing couple should work closely with their attorneys to make sure that everything gets covered.
Different retirement accounts have different processes for how they can be split up between a divorcing couple. If the soon to be ex-spouse has a workplace retirement plan that the other spouse is entitled to a portion of, they will need to go through a process called qualified domestic relations order. This is the case whether discussing dividing a 401(k) plan or dividing traditional pension plans. Traditionally, an attorney would contact those who administer the retirement plan to determine what steps are needed to make a smooth transfer of a portion of 401(k) funds from spouse to another.
There are different procedures for splitting a traditional IRA or a Roth IRA. When a high asset divorce takes place, a family law attorney will work with their client by advising them on shared accounts as well as laws pertaining to the division of property and asset valuation. They will also work with their clients when it comes to other practical issues that may take place during the divorce process.