When older couples in Ohio decide to divorce, they may face different concerns than those who end their marriages at a younger age. While concerns about child custody and support may no longer be relevant, financial concerns can be a top priority for those approaching retirement. Divorce among Americans over 50 has doubled in the past two decades and continues to rise. For people in this demographic, a split in retirement investments can have a significant impact on financial outlooks for the future.
In addition, it is important for people going through a divorce to properly split these funds. Even in an amicable situation where the parties are fully prepared to divide a 401(k), the proper procedures must be followed in order to avoid a costly and unnecessary hit in taxes, fees and penalties. Some kinds of assets, like annuities, can be more difficult to divide. Therefore, it might make more sense to keep them in the name of one spouse in return for other properties or investments.
In order to divide a 401(k) or pension plan, a qualified domestic relations order (QDRO) is necessary. This type of court order is issued to the plan administrator and allows the fund to be divided without tax penalties or fees. For an IRA, on the other hand, the order for division can be made as part of the divorce decree and still allows ex-spouses to avoid unnecessary costs and taxes.
The financial adjustment that follows divorce can be difficult for people at any age. However, it is especially complicated for those who have shared a household for many years. A family law attorney can advocate to protect a client’s interests during divorce and strive for a fair property division settlement.