How does divorce affect your retirement accounts in Ohio?

During a divorce, it’s easy to focus on immediate concerns like child custody and splitting assets such as your home or vehicles. But it’s equally important to consider how divorce affects your retirement accounts. In Ohio, these accounts are marital property. This means they’re subject to division during divorce proceedings.

Understanding this can help you know what to expect regarding your assets after divorce.

Taking an equitable approach to division

By law, all retirement benefits that either spouse acquires during the marriage are marital property. This includes a wide range of accounts, from traditional and Roth IRAs to 401(k)s, pensions and deferred compensation accounts.

When dividing these retirement assets, Ohio follows the principle of “equitable division.” This doesn’t necessarily imply a 50/50 split. Instead, it takes into account several factors, including:

1. The length of the marriage
2. The couple’s total assets and liabilities
3. The potential custodian of the family home
4. The ease of converting property into cash
5. The financial implications of leaving certain assets undivided
6. The tax consequences of property division
7. The cost of selling property for equitable distribution
8. Any other factors the court deems relevant and fair

Ohio courts carefully evaluate these factors to ensure a fair distribution. Their goal is fairness, not equality. So, in some cases, one spouse might receive a larger share of an asset, like a 401(k), while the other might receive more of a jointly-owned property.

Dealing with the legal details of a divorce

Typically, courts classify contributions to retirement accounts during the marriage as marital property. The same applies to any of its generated earnings. But, if you contributed to these accounts before your marriage, the courts might classify that portion as separate property.

The complexity of divorce can undoubtedly increase when you throw retirement assets into the mix. Given this, it can be beneficial to consult a legal professional. They can help protect your interests and guide you through the property division process in line with Ohio laws.