For many in Kentucky who choose to divorce, the end of a marriage is fraught with emotional and practical issues as well as long-term financial concerns. In the case of retirement funds, these often represent the single largest asset that is part of the couple’s marital property, reflecting substantial savings and the result of hard work. As both parties often look towards these accounts as central to their financial futures and health, dealing with their distribution in a divorce can be problematic.
All of the complex matters that arise in relation to retirement accounts and property division can be exacerbated as the value of those accounts rise; in a high-asset divorce, it is critical that proper attention is paid to the precise details of the accounts in order to ensure a proper distribution. Retirement accounts are frequently subject to an array of specific financial and legal regulations, and if these rules are not followed, the two parties could face significant excess taxes and penalties as a result.
For retirement accounts housed at the workplace of one spouse, a court order called a QDRO or qualified domestic relations order is necessary to distribute them according to the divorce settlement. While the QDRO should reflect the agreement for division specified in the divorce, the order is not automatically issued with the divorce decree and must be requested from the court. In addition, for each retirement account that will be divided, a separate QDRO is necessary.
The family law attorney that represented one spouse in a high-asset divorce may also be able to draft the necessary QDRO and have it approved by the court. The lawyer can work with the plan administrators for the funds in question in order to ensure that the division of assets is carried out in a proper manner, in line with relevant regulations and reflecting the content of the divorce settlement.