When going through a divorce, the things that you owned as a couple will have to be divided up. Oklahoma is an equitable division state, which means the courts will divide assets based on the needs, contributions, income, and other factors rather than just splitting everything up 50/50. This is an important concept to understand, especially when it comes to dividing up retirement assets. Whether you are still young, or retirement is just around the corner, knowing what happens to your retirement accounts after a divorce is essential.
Dividing 401(k) Balances
Any assets that were contributed during the marriage, or grew during that time, can be split up in a divorce. If one party has been contributing to a 401(k) throughout the marriage, and the other party hasn’t, the judge will typically award each party a percentage of the assets contained within. They can also use money in a retirement account like this to “offset” property or other assets given to one party. For example, if one of the spouses gets the vacation home, the other may get a larger percentage of the 401(k).
Retirement Savings Prior to the Marriage
In most cases, any retirement savings that were there prior to the marriage will stay with the person who had them. While the courts can also divide these assets up, especially for marriages that have lasted ten or more years, a good starting point is to assume that each party will exit the marriage with at least the savings that they brought into it.
Social Security Benefits
Even social security benefits can be divided up during a divorce, but only if the marriage has lasted ten or more years. This is especially common if one of the spouses worked and the other stayed home to take care of the house and any children.
Using a Qualified Domestic Relations Order or QDRO
If any type of retirement account is divided up during a divorce, it is best for everyone involved to use a Qualified Domestic Relations Order or QDRO. Oklahoma uses this type of order to provide the receiving spouse with access to their portion of the accounts directly. This not only helps to ensure the receiving spouse gets everything they are awarded, but it makes it much easier on the spouse ordered to pay as well. Rather than having each party work with the other to make the necessary arrangements, this type of document has the plan’s administrator take care of it.
Protecting Your Retirement Interests
Retirement accounts are an important part of any division of assets, and it is critical that they are handled properly. Hensley Legal Services has years of experience helping clients throughout their divorce, including with retirement assets of any amount. Contact us to schedule a consultation and begin planning the best course of action for your unique situation.