Look at a divorce like the break-up of a business


Source: www.cincinnati.com

 636288921284322422-simplymoney-team.jpg

 

Look at a divorce like the break-up of a business

Tyler from West Chester: I’m about to go through a divorce. What’s this mean for my 401(k)?

Answer: First, understand what marriage is. It’s nothing more than a business contract between two people. Think of it this way: Business partners have legal rights to each other because they are financially vested together in a business.  Married couples have legal rights to each other because they are financially vested together in a marriage. This is how it’s legally viewed. The Supreme Court of Ohio has determined retirement benefits (along with other assets, such as equity in a home) accumulated during a marriage are marital assets to be divided “equitably” at divorce.  That means divided fairly.

Depending on the value of your other marital assets and when it was acquired, your wife may be entitled to as much as half of your 401(k)’s value.

There are two things for you to take into account regarding your 401(k).  The first is how the money will be divided in a divorce. If there are numerous accounts (such as if your soon-to-be ex-wife also has a 401(k)), in Ohio, each of you may receive up to half of the marital portion. There are different ways to “equitably” divide up the money. Your lawyers will negotiate who gets what portion as a part of the total marital assets. Whatever you agree to, just be aware of the tax implications that may result. Consult your lawyer and a tax professional to determine what’s financially best for you.

The second thing to pay attention to is your 401(k) account’s beneficiary. Your wife is likely the beneficiary now, but you’ll probably want to change this once your divorce is finalized. Just be careful whom you choose. If you have underage children and you name them as beneficiaries, should you die while they’re still minors, as the guardian she may end up back in control of your money. Make sure to discuss your wishes with your lawyer.  

The Simply Money Point is that 40 percent to 50 percent of marriages in the U.S. end up in front of a judge, with the divorce rate for second marriages even higher. Most marry for love. Many divorce because of money. Breaking up any business, even a marriage, can be quite expensive.

How the Law Office of Scott A. Ferris, P.A. Can Help

If you, a friend or a family member find themselves in a situation such as this, please call the Law Office of Scott A. Ferris, P.A. at 305 670-3330 right away. Scott A. Ferris, Esq. is a licensed family law attorney who has been practicing law since 1987. He is available whenever you need him to defend your rights. Please learn about our firm at www.FerrisLawFirm.com.

Republished by the Law Office of Scott A. Ferris, P.A.

Related Posts:

Written by

No Comments Yet.

Leave a reply

Required