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How Does a 401k Get Split in an Ohio Divorce?

Nearly everyone worries about their financial future. After years of contributing to a retirement account, it is normal to want to preserve your hard work. Unfortunately, a divorce can affect your retirement plans in the same way that it affects all your other assets.

It is a common mistake to believe that if an account has only your name, it is considered separate property and is, therefore, safe from property division during a divorce. In truth, almost any asset you contributed to during your marriage will be considered a marital asset at the time of divorce. Here’s what you need to know about marital property, separate property, and property division as it relates to retirement accounts:

Marital Property

In Ohio, the court assumes that each spouse contributed equally to the acquisition of assets during a marriage. Even if one spouse is considered the “breadwinner” and the other is the “homemaker,” Ohio family law will still rule that they are both entitled to equal shares of their marital property. Marital property is defined as all of the following:

  • All real and personal property currently owned by either spouse or both.
  • All real and personal property acquired during the marriage, including retirement accounts.
  • Any interest gained from real or personal property owned by either spouse
  • All income and appreciation gained on either spouse’s separate property that was due to the labor or contributions of either spouse during the marriage.
  • Participant accounts with deferred compensation plans such as untaxed retirement accounts.
  • All that is not considered marital property can be defined as separate property.

Separate Property

Separate property is very specific, and oftentimes you will need an experienced attorney to help you argue an asset be considered separate property rather than marital property. Separate property is defined as any asset that falls into the following categories:

  • Inheritance designed to be bequeathed to one spouse and not the other.
  • Property acquired by one spouse prior to the marriage.
  • Passive income and appreciation from separate property acquired during the marriage.
  • Property acquired during a legal separation.
  • Property excluded from the marital property by a prenuptial agreement.
  • Compensation from a personal injury claim.
  • Any gift that can be clearly proven to have been given to only one spouse.

How Retirement Accounts Are Split

In Ohio, courts usually allocate separate property to the property’s owner and equally divide all marital property, including retirement accounts, unless, for some reason, it would not be equitable. Bear in mind sometimes we are talking about dividing up the value as opposed to physically splitting each and every marital asset. In other words, there will normally be a 50/50 split in retirement account values on the marital balance sheet, but that does not necessarily mean each account has to be physically divided. For example, if each spouse has the same total account values, then each may keep their own retirement accounts. On the other hand, as separate property, an inherited retirement account may be awarded solely to the person inheriting it.

Divorces can be handled in various ways, so if you and your former spouse reach an equitable way of distributing your retirement accounts, the court will uphold it. If you cannot agree, a judge will divvy things according to the law. In a case where both spouses have similar-sized retirement accounts, there may be no need to divide funds at all. In situations like this, the retirement account of one person may be used to “buy” the property that the two formerly shared. This type of asset distribution is known as a distributive award.

Distributive Awards

Say, for instance, that the retirement accounts of both parties are relatively the same, but one party wishes to keep sole ownership of an expensive asset. The retirement account can be used to “buy” the asset from your former spouse. Instead of dividing the family home traditionally (which would involve selling it and splitting the profits), one party can retain ownership by allocating funds from their retirement account to pay the other party for that party’s share of the house. In this way, both spouses can keep the assets that matter most to them while the marital property is still divided fairly.


If you have questions about how divorce and equitable distribution will affect your retirement account, call Garretson & Holcomb, LLC at (513) 863-6600.

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