Division of Pensions, IRAs and 401(k)s in Indianapolis
Division of pensions, IRAs, and 401(k)s is among the most highly contested aspects of divorce. Retirement assets may represent a significant portion of the net worth of many couples. If a division is not performed properly, it can lead to serious tax consequences and penalties.
At Trapp Law, LLC in Indianapolis, IN, we have significant experience handling property division in divorce, including pensions, IRAs, and 401(k)s. Our family law lawyers in Indianapolis understand the sensitive nature of divorce and finances and provide high quality, affordable legal services. You are invited to meet with us in a free and confidential initial consultation. Contact us for knowledgeable representation in a divorce involving pensions, IRAs, or 401(k)s.
Is a Pension, IRA, or 401(k) Split Down the Middle in an Indiana Divorce?
As a general rule in Indiana, all property acquired before or during the marriage is split 50/50 between the spouses in a divorce. However, this does not necessarily mean that your spouse will get half of your pension, IRA, or 401(k). There are other ways to arrive at an equitable division of property without splitting retirement assets down the middle.
When Should Retirement Assets Be Split Down the Middle?
In some cases, splitting retirement assets may be the best or only option for dividing property in a divorce. An example would be a long-term marriage in which one spouse has never worked and the couple has no other assets equal in value to the working spouse’s retirement plan.
What Are the Alternatives to Splitting a Pension, IRA, or 401(k) with Your Spouse?
In many cases, an alternative approach may be in the best interests of both spouses. For example, if both spouses have retirement accounts of comparable value, it may be best for each spouse to retain his or her individual retirement account, instead of splitting both accounts 50/50.
Another option is to negotiate a resolution in which the spouse with the retirement account gives up another asset of comparable value. This could be real estate or non-retirement investments. In this case, the other spouse would agree to accept another asset in place of half of the retirement account.
Why Splitting Retirements Assets in a Divorce So Complicated?
Property distribution is a complicated aspect of divorce, and high-value retirement assets are often a subject of dispute. Divorcing spouses face unique challenges concerning valuation, the timing of distributions, tax consequences, and other issues related to retirement. It is critical to strategically address these issues and their long-term consequences when dividing property in a divorce.
Accessing a Spouse’s Retirement Plan after Divorce
If the court has ordered that you are entitled to a portion of your spouse’s workplace retirement plan, you will need a qualified domestic relations order (QDRO) to access the funds. A QDRO is separate from and based on the final divorce decree. You will need a QDRO for either a pension plan or a 401(k).
Why Choose Us for Property Division Involving Pensions, IRAs, and 401(k)s?
Our family law attorneys at Trapp Law, LLC have experience handling divorces involving pensions, IRAs, and 401(k)s. We take a collaborative approach to resolving divorce disputes to find workable solutions that satisfy the needs of both parties. However, we are fully prepared to protect your best interests in hearings or at trial. We understand that no two cases are the same and develop creative and custom solutions for every client. Contact us today!