Dissolution can be a long process from filing to settlement or trial, and divvying up retirement accounts is an important process. These accounts are typically built up during the marriage and are considered marital property subject to equitable division under Kansas law. Because these plans are governed by an array of state and federal laws, a specialized court order is required. At The Henry Firm, P.A., with offices in Overland Park, Kansas, we provide focused and comprehensive counsel on the effective division of these important assets.
How much of your spouse’s retirement account is yours after a divorce? A general starting point is half of whatever amount was contributed to the account during the marriage. So, if a party contributed $200,000 to an account, the other party may reasonably argue for $100,000.
There are many types of retirement plans, and nearly all of them are subject to division in a divorce. Some common examples include:
For pensions and 401k-type plans, a special court order called a qualified domestic relations order (QDRO) or simply a domestic relations order (DRO) is required to split the plan. Lawyers typically draft these orders, obtain the parties’ signatures, forward to the court for the judge’s signature and then finally send it to the plan administrator to carry out the division. For most IRAs, no QDRO or DRO is required. However, you will still need competent legal advice about how to divide or rollover the account balance in order to avoid surprise taxes.
With certain exceptions, retirement division is governed both by federal law (which protects retirement accounts and pensions from creditors and employer insolvency) and by state law (which influences the share each party is to receive and sets procedures for getting the court order drafted and signed).
Kansas is an equitable division state, meaning the judge is free to divide property in whatever manner he or she decides is fair and just under the circumstances. This may mean the judge awards more or less than 50 percent of the marital share of a retirement account to one spouse.
Parties have many choices when dividing retirement accounts. For cash-based retirement plans, like a 401k, the parties may choose to:
For pensions, the options vary by plan, but may include:
Deciding what is the right method for you is a matter of balancing your legal rights, your tax situation and your immediate needs. Our seasoned attorneys can assist you in this analysis.
While many people choose to handle their own divorce and represent themselves in court, dividing retirement accounts is one task that especially should not be undertaken without legal help. At The Henry Firm, P.A., with offices in Overland Park, Kansas, we can assess your situation quickly and reliably, and draft retirement division orders with care. To schedule a consultation, call 913-381-5020 or contact us online.