Property division: Kentucky residents may want to consider 401(k)
For some Kentucky residents, going through divorce brings more upset about having to divide property than ending the relationship itself. While bringing the marriage to an end may mean a happier future for those involved, property division can cause considerable upset in many cases. Therefore, parties may wish to remain vigilant when it comes to working toward the outcomes they desire.
One type of asset that many people may not fully consider right away when dividing property is retirement accounts. However, a former spouse may be entitled to a portion of the other person’s 401(k), and as a result, understanding whether this division is possible may be prudent. In these cases, the Employee Retirement Income Security Act and the Internal Revenue Code could come into play.
In order for an ex-spouse to obtain a portion of the 401(k) account, the ERISA procedures for utilizing an alternate payee must be followed. Additionally, if this division is accepted by the court, a qualified domestic relations order must be filed in order for the assets to properly transfer from one individual to another. This order also prevents taxation on the receiving of those assets.
Because the proper procedures for obtaining portions of a retirement account during property division may seem complicated, Kentucky residents may wish to gain assistance with this endeavor. Speaking with experienced attorneys about this type of asset division may allow interested parties to better understand what they need to do in order to obtain their desired outcomes. By having professional knowledge, individuals may feel more assured that they are taking the proper steps.
Source: normantranscript.com, “Don’t overlook a 401(k) in a divorce“, Julie Jason, June 25, 2017