Those going through divorce in Ohio should be aware of Ohio laws governing divorce property settlements and the importance of including retirement planning in property settlement considerations.
August 17, 2013 /24-7PressRelease/ -- Dealing with retirement funds in an Ohio divorce
Article provided by Edward F. Whipps & Associates
Visit us at http://www.efwhipps.com
Dividing property may be one of the most stressful parts of going through divorce. Many people do not know what property they have rights to, and confusion about dividing retirement assets is particularly common. Those going through divorce in Ohio should be aware of Ohio laws governing divorce property settlements and the importance of including retirement planning in property settlement considerations.
Ohio property settlement laws
When an Ohio court divides property in a divorce, the first thing it does is determine what is non-marital and marital property. Non-marital property is the real and personal property that each spouse owned prior to the marriage, and marital property is everything the spouses acquired after the marriage through the date of the final hearing for the divorce or legal separation action. Inheritances and gifts from third parties that either spouse received during the marriage remains non-marital property, however.
Ohio is an "equitable property division" state, meaning that the court divides marital property between spouses in the way it thinks is the most fair -- which does not always mean that the court divides the property equally between spouses. Some of the factors that the court uses when determining the most equitable way to divide property include:
-How long the marriage lasted.
-The assets and debts of each spouse.
-Whether a spouse who has custody of the children should receive the marital home.
-How liquid the assets the court is distributing are.
-Whether it is more economically advantageous to keep an interest in an asset intact.
-Tax implications of the property division.
-Costs associated with selling property to make the property division.
-Property divisions to which the spouses have previously agreed.
-Retirement benefits of either spouse.
-Any other factors the court finds relevant.
Retirement funds and divorce
Some people believe that pensions and retirement accounts like 401ks and IRAs are not marital property, since only one spouse's name is on the account or pension. However, Ohio law explicitly states that such funds are martial property if spouses deposited funds into retirement accounts during the marriage.
It is important for those going through divorce to consider not only their immediate financial needs when negotiating the property settlement, but to also determine what they will need to support themselves after they retire. In some cases, it may make more financial sense for a spouse to forego assets like the marital home or other real estate in order to receive retirement funds in the property division. This is particularly true for spouses who have removed themselves from the workforce in order to stay home and raise children for any amount of time. Those spouses' personal retirement savings would be far less than their spouses who worked the entire time of the marriage - if they have any personal retirement savings at all.
Speak with an attorney
Dividing retirement assets in a divorce property settlement can be very complex. Understanding the value of the assets and the tax implications of dividing the funds requires expert knowledge. If you are considering divorce and have questions about property division issues, speak with an Ohio divorce attorney with a history of successfully handing property division matters.
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