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How Divorce Affects Your Retirement in Ohio

By December 26, 2021January 3rd, 2022No Comments

When you and your spouse decide that it’s time to end your marriage legally, several factors may arise. Throughout the divorce or marriage dissolution process, you’ll need to make crucial decisions with lasting implications, such as which spouse will keep the family home, who becomes the primary custodian, whether you’ll need to establish alimony payments, among many other decisions. Divorces often include hard-earned retirement accounts or pension funds for older and more established couples. Suppose you are about to seek a divorce or marriage dissolution. In that case, it’s best to work with an experienced attorney to help you understand your options and guide you towards an equitable outcome. In the meantime, let’s examine how your divorce or dissolution could impact your retirement accounts and what you can expect from the process.

Understanding Marital Property Division In An Ohio Divorce

In general, when a married couple seeks divorce or dissolution, the court will determine which assets are considered “marital property: – those that are fair game for division. Marital assets are typically those acquired by both spouses together or separately throughout their marriage—a vacation home purchased together, income, and other shared financial assets.

In contrast, “separate property” applies to assets or property owned by one spouse before the marriage occurs. Still, it could also apply to an inheritance or gift to one spouse during the marriage. While separate property is usually not divided between divorcing spouses, marital property is assessed by the judge, who then attempts to divide it between the spouses in an equitable manner, which usually means equal. In Ohio, retirement benefits and pensions are also considered marital property, meaning they are subject to division by the court.

The Court’s Approach to Dividing Pensions and Retirement Accounts in Ohio

An Ohio judge will examine each spouse’s retirement benefits when determining equitable division. Similarly, vested pensions are considered marital property, as are unvested pensions in many cases. While it can be challenging to assess the actual value of each marital asset, the court tries to encourage the couple to settle on an approximate value of each particular asset. If the spouses cannot settle on an agreed value, they may consult an outside expert—such as an accountant, real estate appraiser, or pension valuator—to assist them.

It’s also worth noting that pre-marriage contributions (and any appreciation in value since acquisition) are typically viewed as separate property and, thus, not part of the division process.

When Divorcing Spouses in Ohio Share a Retirement Plan

In some cases, a married couple shares a retirement or pension plan. In such an event, the couple must complete a Qualified Domestic Relations Order (QDRO), which is a set of written instructions stating that both parties are dividing their pension benefits. This document contains the terms and conditions of the division of retirement benefits, such as how much each spouse receives, when the payments will be paid, the method of payment, and other important instructions. Once completed, the QDRO can be submitted to a plan administrator to ensure that the terms and conditions are respected and fulfilled. (For state plans, Ohio’s Division of Property form must go through court approval.)

Social Security Benefits Within an Ohio Divorce

Ohio courts may consider Social Security benefits, but they cannot be divided in the same way as other retirement assets because of federal laws. However, if one party is entitled to a significant Social Security benefit, sometimes the court will consider this benefit when dealing with the other spouse’s state-based retirement plan since state-based employment earnings can fall outside the social security system.

Setting Aside Retirement and Other High-Value Assets for Children or Heirs From an Ohio Divorce

There are other options for moving assets into a trust or other vehicle to ensure that any affected children from the divorce can be taken care of into their future. Your divorce attorney may be able to help with initial guidance and can make a referral to an appropriate estate planning attorney to ensure that assets are placed properly.


For more information about asset division in the West Chester, Mason or Hamilton areas, contact the experienced and knowledgeable divorce and dissolution attorneys at Garretson & Holcomb, LLC. Call (513) 863-6600 today to get started.

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