Getting a divorce is one of the most disruptive, stressful and complicated events in life. The situation becomes even more complex if there are significant retirement savings or a business involved in the equation. People’s main concern during a divorce is how to best protect these assets.
In this article, we will discuss what the law says about how assets are distributed between spouses. Read on for more information on what happens to your business or retirement assets in a divorce in Ohio.
Dividing Assets in Ohio: An Overview
The first important thing to remember in the case of an Ohio divorce is that in this state, the legal principle of equitable distribution plays a key role. Equitable distribution means that the way assets are divided is in a fair and just way, not a strict 50/50 rule. When deciding this, the court takes into account the financial contribution each spouse made to the marriage, how long the marriage lasted, and what the future financial needs of each spouse may be.
Property is set in two categories:
- Marital property: What has been acquired during the marriage by each spouse, this is subject to division.
- Separate property: What has been acquired before the marriage, and what has been acquired during it as a gift, bequest, devise, or descent. Generally, it’s retained by the owner in an Ohio divorce.
It’s important to remember that businesses and retirement accounts could be considered partially marital, and that depends on their growth during the marriage. Let’s explore those in a deeper context.
Protecting Your Business in an Ohio Divorce
In the event of a divorce, business owners may find themselves concerned about their personal wealth, as well as about their company’s stability. The factors courts consider to determine what is marital property in an Ohio divorce are essentially:
- Conducting a business valuation: This is important to determine what part of the business, if any, is marital property.
- Marital vs. separate share: If the business was founded before the marriage, you would need clear documentation to prove what part of is it separate, as the business’s value growth during the time you were married is subject to division.
- Outcomes: For the marital share, courts will determine possible outcomes, for example one spouse buying out the other’s interest.
- Pre- or post-nuptial agreements: These serve as in-advance deciding factors for business interests post-divorce.
The situation is similar for retirement savings, but some different legal rules apply.
Protecting Your Retirement Savings and Pensions
At the center of divorce-related issue stand a couple’s retirement savings. Often, that is their largest asset, and the law on the subject you should know is:
- Marital vs. separate share: Any pension contributions spouses made during the marriage are considered marital property. Any made before the marriage generally remain separate.
- Division tools: Often, courts will use a Qualified Domestic Relations Order (QDRO) in splitting pensions and 401(k)s without tax penalties.
- Pensions in Ohio: Defined-benefit plans are valued differently than 401(k)s or IRAs – actuarial valuation may be needed.
An important thing to remember is to not make the mistake of cashing out or making a transfer without a QDRO. That can trigger penalties and taxes. You must plan carefully, keep detailed documentation, and consult an experienced Ohio divorce attorney to help you safeguard these assets for your future.
Protecting Assets: Legal Strategies
Nobody gets married with the instant thought of planning for what could happen in a potential divorce. However, that exact step is necessary to best protect your assets – careful consideration of your options before and during your marriage.
Here are some strategies for safeguarding your business or retirement assets in an Ohio divorce:
- Keeping accurate records of marital and separate property.
- Consulting expert witnesses, such as financial advisors and forensic accountants.
- Negotiating of the best possible settlement, for example, one spouse gives up property interests in exchange for full ownership of retirement accounts.
- Considering mediation instead of relying entirely on the court for division.
Everybody wants to protect their business and retirement accounts in an Ohio divorce – those are high-stakes assets. As such, they require thorough understanding of property law in Ohio and being proactive in seeking legal advice.
This is where David Shook can be of help. Our family attorneys offer a breadth of experience and invaluable expertise in matters concerning asset division in an Ohio divorce. We are dedicated to ensuring you receive fair treatment in your divorce process – the best possible outcome for you is our shared goal.Contact David Shook today, and let’s safeguard your financial future together.
