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Protecting your 401(k) in an Indiana divorce

On Behalf of | May 23, 2024 | Firm News |

Moving forward with a divorce may be one of the toughest decisions you can make in life. When high-value assets are at stake, it becomes imperative to understand how to safeguard your retirement savings during such a pivotal period.

When navigating a high-asset divorce in Indiana, it is crucial to understand the state’s equitable distribution laws, which require the courts to split everything in a fair way but not always 50-50. This includes the 401(k) contributions you made during the marriage

Keep detailed financial records

Detailed and accurate financial records are your best ally during a divorce. Through this documentation, you can show what properties belong to both you and your spouse and what is just yours. These records include your 401(k) statements from before and during the marriage, records of contributions, as well as professional valuations to provide a clear picture of your 401(k)’s value.

Get a Qualified Domestic Relations Order (QDRO)

Essentially, a QDRO is a legal document that allows for the division of a retirement plan during a divorce. This document protects your interests and ensures a smooth division of your 401(k) without incurring penalties or taxes.

Plan for the future

After the divorce, it is essential to reassess your financial plans and retirement goals. Adjusting your strategy can help you rebuild your retirement savings and secure your financial future. It would be best to increase your 401(k) contributions to accelerate rebuilding your savings. It would also help to diversify your investment portfolio to balance risk and growth potential.

Protecting your retirement savings in divorce requires detailed documentation and strategic negotiation. Proactive planning and a clear understanding of your financial landscape can go a long way in helping you secure your financial well-being as you move on with your life post-divorce.