How are Retirement Benefits Divided in a Divorce?

Dividing Retirement Benefits

Even if only one party earned retirement benefits during a marriage, both spouses are entitled to 50% of those earned benefits. To divide the retirement benefits, which are typically not payable until the age of retirement, the law uses what is called a Qualified Domestic Relations Order ("QDRO"). Once issued by the Court, the QDRO is given to the employer who then releases a portion of the retirement benefits to the former spouse of the employee. The former spouse can then rollover the funds into an IRA or other retirement account and manage the funds themselves. The retirement funds can also be cashed out under some circumstances. In fact, when funds are withdrawn and transferred to a former spouse during a divorce pursuant to a QDRO, there may not be a penalty for cashing out the funds, other than income taxes.

Additionally, the Indiana Court of Appeals in 2016 in the case of In Re The Marriage of Carr held that pension retirement benefits are a marital asset that must be included in the marital estate and divided. Oftentimes, pensions provide workers with the option to elect to reduce their monthly pension benefit so that these pension benefits can continue to be paid to their spouse after their death. This is known as a pension survivor benefit. The court has held that this pension survivor benfit has a value to the surviving spouse that must be valued and attributed to the surviving spouse when the marital estate is divided at the time of the divorce. This decision by the Indiana court makes it important to take this into consideration when divorcing.

If you are divorcing and you or your spouse have retirement accounts, you should seek legal advice. If you have questions, please call us, we can help.


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JR Emerson is an attorney who represents car accident victims, slip and fall victims, semi-truck and 18 wheeler victims, nursing home abuse victims, medical and dental malpractice victims, acts as a criminal defense attorney representing those accused of possession, minor in consumption, domestic violence, battery, assault, dui, ect, and family law including divorce, child custody modification, and child support modification in Marion County, Hendricks County, Boone County, Hamilton County, Hancock County, Madison County, Johnson County. Cities in which he practices include: Zionsville, Lebanon, Whitestown, Carmel, West Clay, Westfield, Noblesville, Fishers, Lawrence, Beech Grove, Speedway, Greenwood, Southport, Franklin, Plainfield, Avon and Danville, Indiana. 317 Law.


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