Equitable distribution is the law of the land in a Kentucky divorce. Couples who don’t settle their own property division matters and who go to court will have to provide a judge with information about their property and their marriage. The judge will then try to split their property in a fair and reasonable manner.
For couples in their forties or beyond, retirement accounts and pensions will often be an important consideration when dividing property. If you have funded a retirement account during the marriage, even if it is only in one spouse’s name, then you may very well need a qualified domestic relations order (QDRO).
What is a QDRO?
A QDRO is a document drafted as part of a divorce settlement. Once there is a court order or agreement about how to divide the retirement account, one of the attorneys in the case will draft the QDRO to reflect the specific division of the account.
After the courts approve it, the QDRO will then go to the plan administrator managing the retirement account. They will be able to divide the account and put part of the balance into a new account created specifically for the other spouse. When done correctly, a QDRO prevents any taxes or fees but you might incur as an early withdrawal penalty.
Using a QDRO helps preserve more of your retirement savings for the two of you and ensures that misconduct after the divorce won’t diminish how much one spouse receives from the other’s retirement account. Learning more about the available tools for dividing your property, like retirement savings, will help you prepare for a complex Kentucky divorce.