McCrea & McCrea | Bloomington Law Firm For Over 85 Years

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812-650-4425
McCrea & McCrea | Bloomington Law Firm For Over 85 Years
812-650-4425

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Dividing Retirement Assets During A Bloomington, Indiana, Divorce

Dividing retirement assets is a crucial part of divorce for many couples in Bloomington, Indiana. Couples often plan to retire together, so one person may be earning retirement benefits through their employment, but their spouse also planned to retire with those benefits. If they get divorced, a QDRO splits the benefits between them. The exact percentage of that split will be based on factors like the length of the marriage and each person’s own financial assets. 

McCrea & McCrea can help during this complex process. As Bloomington divorce attorneys, we have more than 85 years of combined experience. Our experienced lawyers also offer free initial consultations, so call now to learn more about retirement asset division options for an IRA, a 401(k), a military pension and much more. 

Using A Qualified Domestic Relations Order (QDRO) In Indiana

A Qualified Domestic Relations Order (QDRO) is separate from a divorce decree, and it establishes an alternate payee as a means of dividing retirement accounts. This way, an ex-spouse can still get the retirement benefits they expected after the divorce – without penalties or additional taxes – even if they were not the one earning those benefits. 

How Do You Divide Retirement Accounts Acquired Prior To The Marriage?

Unlike other states, Indiana generally considers all property acquired before or during the marriage to be marital property. Anything the couple owns, they own together. That said, the division of assets will not necessarily be a 50/50 split, as Indiana is an equitable division state. The court seeks a fair resolution based on numerous factors, such as the couple’s income or the date the assets were acquired.

What Dividing A 401(k) Means For Your Taxes

Early withdrawals from a retirement fund can trigger a 10% tax penalty. However, there is no penalty when directly transferring those assets to the alternate payee named in the QDRO. It is also important to consider which assets each person receives. For instance, the court can issue an order applying a “tax-effect” when one person receives a post-tax asset (such as real estate) and the other receives a pretax retirement account.

Call For A Free Consultation

To learn more about dividing retirement assets in divorce, call 812-650-4425 or use the online contact form to schedule your free initial consultation.