401K in Divorce: A Tip That Can Save You Thousands

Unfortunately, going through a divorce leads many people completely cash-strapped. While not ideal, if you have not built up enough liquid savings, you might be considering a withdrawal from a 401K. Here is an important tip you need to know about a 401K in divorce. This only works if you are awarded all or part of your spouse's 401K. It does not work for your own.

Your Spouse's 401K in Divorce

When you file the Qualified Domestic Relations Order (QDRO) to have all or part of your former spouse’s 401K distributed to you, you have an opportunity to take cash out of the account without paying the IRS’s 10% penalty (on funds withdrawn prior to age 59.5). To take advantage of this, when dividing a 401K in divorce, have the portion you need, paid directly from the account to you.

It does not need to be the full amount that you are receiving.  Do not roll it into an IRA and then take it out because then you will be subject to the penalty.

Am I suggesting that retirement...

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How To Calculate Ohio Child Support

UPDATE: OHIO IMPLEMENTED NEW CHILD SUPPORT GUIDELINES ON MARCH 28, 2019. THE RESOURCES BELOW REFLECT THESE CHANGES.

For those who have minor children at the time of a divorce, one party or the other will likely be paying child support (unless they truly share parenting 50/50 and make about the same amount of money). Child support is paid until the child reaches age 18 or graduates from high school, whichever happens last. There is some gray area when it comes to how to calculate child support in Ohio.

Why Calculating Ohio Child Support is Not Black and White

Many people think that Child Support calculations are black and white. In some cases, that may be. However, there are many cases in which the calculation can be a little more complex. The State of Ohio offers worksheets as well as a manual for how to determine the appropriate inputs for the calculations. Links to the resources are below.

At the most basic level, child support is calculated based on the combined gross...

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QDRO: I need a what??

If part of your divorce settlement includes a division of retirement assets held with a current or former employer, you may need a QDRO (Qualified Domestic Relations Order) or similar document, depending on the retirement plan. One of the mistakes that I see people make when dividing assets, is simply dividing each account down the middle. Seems like it would be fair, right? While it might be fair, it may also cause you to incur more costs than you would, if you were a little more creative about your settlement.

There are a couple of costs to consider. There is a cost to having someone draft the QDRO, which generally ranges from $450-$1000. Additionally, each plan charges an administrative fee on their side as well. That fee generally ranges from $350-$1000. Thus, if you are dividing up several plans, the administrative process may become costly.

Important things to know about QDRO's:

1. You must know what the plan that is being...

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Valuing a Pension for Divorce is a Wise Investment

Uncategorized Nov 09, 2016

Are you losing thousands of dollars because of your financial fears during your dissolution or divorce?

The cost of the divorce itself is one of the biggest fears I hear from clients. There is no question. It will generally take longer and cost more than you expected. However, that does not mean it's a good idea to cut corners.

Valuing a pension for divorce: Don't cut corners

One frequent corner cut is a pension valuation. Pension valuations do not take a lot of time. However, they do require you to work with someone other than your attorney. Thus, even when recommended by their attorneys, many clients choose not to have them done.

It is not even necessary to meet with your valuation expert in person. All required information can be provided via phone/email. In some cases, the attorney can even provide all of the relevant information. I recognize that it can feel stressful and overwhelming to work with yet another professional and have yet another bill to pay. However, it could...

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