With an impending divorce, you’ve got a lot on your plate. Between asset division, child custody issues, spousal support and the like, you have a lot to keep track of and negotiate for. Even so, don’t make the mistake of forgetting to leverage one of your most valuable bargaining chips – your retirement accounts, as well as those of your spouse.
Privately negotiated divorce agreements
The court doesn’t necessarily have to divide your assets for you. You have the option of taking matters into your own hands. You and your spouse can each hire attorneys, a mediator or both to assist you in negotiating your own private asset division agreement. If this agreement is fair and reasonable, the court can adopt it and enforce it as part of the final divorce decree.
If you are concerned with keeping your own retirement assets intact, you can offer different, equally valuable assets to your spouse to let you keep them. If, rather, you are trying to get a share of your spouse’s retirement accounts, then you might be able to demand your fair share of them in exchange for foregoing your claim on certain other assets.
Court-led division of assets
If you are unable to come to an agreement, and the court has to step in, they will follow the standard rules for asset division in Kentucky courts. This means that they will only divide your marital property, not any separate property. Separate property includes most things that you had before you got married.
Thus, when it comes to retirement accounts, courts will first determine how much of the accounts you or your spouse earned before getting married, and how much you earned during your marriage. Only the portion earned during marriage is subject to division.
Thus, it’s possible that the court will decide to give you or your spouse a large chunk of the marital portion of the other’s retirement accounts. If so, you may need your attorney to draft a Qualified Domestic Relations Order (QDRO) to make sure that you receive the portion of the accounts that you’re entitled to, when the time comes.
The asset division stage of the divorce process can be lengthy, complicated and contentious. Luckily, if you use them right, retirement accounts can be effective leverage tools to make sure you get what you rightfully deserve in your negotiations.