Nancy L. Sponseller

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Divorcing Ohio residents should address retirement accounts

On behalf of Law Office of Nancy L. Sponseller posted on Friday, February 7, 2014.

Columbus financial planners may wonder how much of their retirement fund will go to a spouse from whom he or she is divorced. Relevant to the discussion is whether a Qualified Domestic Relations Order was filed as part of marital property division at the time of a divorce. The QRDO specifies the rights of a former husband or wife to share in their opposite number’s retirement plan money, but legal experts say that the document is not always necessary.

Other than the QRDO, some considerations must be made before any amount is shared from a retirement fund. These include any orders regarding monies that are found to be partially or wholly marital assets. In some states, any contributions to a retirement plan are considered marital property that must be equitably distributed between the holder of the account and the participant’s ex-spouse. Usually, if spouses do not have some other agreement legally specified, judges will split the retirement money 50/50 between them.

The QRDO comes into play if certain retirement assets are covered by the federal Employee Retirement Income Security Act. If they are, then the former spouse must complete and file the document with the court. When a QRDO is needed, it is most often filed during the actual divorce process or immediately following an entry of a Judgment of Divorce. Prospective retirees and their spouses should be aware, however, that not all retirement plans are subject to ERISA.

Whether a couple’s assets are retirement accounts, bank accounts or other marital property, an equitable division is often ordered by a divorce court. Complex valuation may be required for items like artwork or those with mainly sentimental value, but property gained during the marriage might be subject to division.

Source:, “Biz Brain: Splitting a retirement plan after divorce“, Karin Price Mueller, January 26, 2014