How Are Retirement Benefits Divided in a Divorce?
What is a QDRO?
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.
Can I Get Cash?
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 In fact, when funds are withdrawn and transferred to a former spouse during a divorce pursuant to a QDRO, there may not be a penalty for cashing out the funds, other than income taxes.
What About a Pension in a Divorce?
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 benefit 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.
We Can Help!
For many parents, child custody and parenting time problems create a great amount of unease. Basically in Indiana courts will resolve any dispute about child custody and parenting time according to the best interests of the children involved.
Child support comes with rights and responsibilities. Normally the non-custodial parent pays the parent with primary physical custody a monthly amount which is more or less fixed by the Indiana Child Support Guidelines.
Indiana law creates a presumption that each party to a marriage is entitled to 50% of the marital property. This presumption can vary, but in most cases, each party is awarded 50% of the marital property and 50% of the marital debt.
Whether you are contemplating divorce, or been arrested or injured you are probably scared, unsure what will come next and what to do. Give me a call. We will sit down, go over your options and work to find a way to move forward. Call me or another attorney. But call someone and get the help you deserve.
- JR Emerson, Attorney
I am here to help. I am not here to judge. For nearly 20 years I have been helping people in difficult situations and I would be happy to speak with you to see how I might be able to help you too.
- Jill Bracken-Emerson, Attorney
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Our attorneys represent people in need of assistance with personal injuries, car accidents, divorce, family law and DUI/OVWI matters. Our clients typically live in counties throughout central Indiana including, Hamilton County, Boone County, Marion County, Hendricks County and Johnson County. Please contact our office to learn how we can help.
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JR Emerson is an attorney who represents men and women in family law matters 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.