People might have chosen Bloomington for a peaceful retirement, which can be a reward for their lifetime of hard work. However, a late-life divorce might suddenly threaten those decades of carefully accumulated savings. For older adults concerned about protecting their assets in Indiana, here is what they need to know.
Indiana’s marital pot and 50/50 presumption
This is one of the most critical concepts in Indiana divorce. The “one-pot” principle requires the court to include most property owned by either spouse in the marital estate, regardless of whose name is on the account. The court may consider 401(k)s, pensions, Individual Retirement Accounts (IRAs), real estate, gifts and inherited property as part of the marital estate, although either spouse may argue that certain assets are separate or deserve different treatment in the final division.
From there, the law presumes a 50/50 division is fair. However, this is only a starting point. Deviating from this equal split is often achievable by proving certain assets should be set aside, such as:
- Properties a spouse owned before the marriage
- Gifts or inheritances received by one party and kept separate
- Significant economic misconduct by one spouse
Generally, the goal is to achieve a division of property that is just and reasonable based on the specific circumstances of the marriage.
QDRO and retirement account divisions
Couples cannot simply write a check from their 401(k) to an ex-spouse. Dividing retirement accounts requires a special court order called a Qualified Domestic Relations Order (QDRO). This instructs the plan administrator to transfer funds to a former spouse without incurring early withdrawal penalties or taxes.
Each retirement plan has different rules, making the QDRO a highly technical document that requires professional legal drafting to protect a person’s financial future.
Effective next steps
Start collecting statements for all accounts and properties. Avoid selling assets, draining accounts, changing beneficiaries or making other rushed decisions. Understanding rights and court procedures during a divorce can also help in protecting financial stability in the future. Most importantly, securing the right legal advice gives the opportunity to create a clear strategy for one’s specific situation.
