Gray divorce, which refers to divorces that occur later in life, presents unique challenges, especially when dividing assets such as retirement accounts. Retirement accounts, including pensions, 401(k)s and IRAs, are considered marital property in Indiana, and will be divided during divorce proceedings. Read on to learn more about how retirement accounts divide in a gray divorce.
Understanding marital property and equitable distribution
In a gray divorce, retirement accounts classify as marital property, even if you acquired some or all of them prior to your marriage. While you may argue to the Court that you should receive more than 50% of retirement assets held by you, the presumption is for a truly equal, 50% division of all marital assets.
Employing Qualified Domestic Relations Orders
Dividing retirement accounts in a gray divorce often involves utilizing a Qualified Domestic Relations Order. A QDRO acts as a court order, establishing each spouse’s right to a portion of the retirement account. It outlines the division methodology, with the account administrator executing the division accordingly. An experienced family law attorney can prepare this document on your behalf.
Given the complexity involved in dividing retirement accounts during a gray divorce, seeking professional guidance is highly advisable. Financial advisors or retirement account specialists can offer insights into tax implications, assist in valuing retirement assets and ensure that the division adheres to legal requirements.