Dividing a 401-K in a Divorce

Financial Consultation Services for Family Law Attorneys

We always rely on attorney expertise for legal matters and encourage you to rely on us for financial expertise. With more than a hundred hours of continuing education specifically focused on divorce financial analysis every year, we are committed to complimenting your practice. Here is a sample of the ways we can support you. Contact us for more information or if you would like to discuss retaining our services on an ongoing basis.

  • QDROs/DOPOs
  • Pension Valuation
  • Preparation of Financial Affidavit
  • Separate Property Tracing
  • Lifestyle Analysis
  • Small Business Valuation
  • Executive Compensation Valuation
  • 401(k) Community Property Valuation
  • Maintenance Buyout Calculations
  • Financial Forensics
  • Family Law Software Support

 

Separate Property Tracing in Divorce

Small Business Valuation for Marital Dissolution

Small businesses and professional practices are some of the most complex assets to value in a divorce. Our business valuation services are cost-effective, fast, and customized to fit your need.

Our expertise in business and asset valuations has been developed over 25 years through distilling complex financial analyses into coherent, concise and persuasive reporting formats.

Our business valuation and settlement analysis includes:

  • Determine if the business has value
  • Determine income available for support
  • Cost-effective business valuations
  • Peer review of business valuations

We can help you determine if a business valuation is warranted and the most cost-effective way to provide the services needed.

 

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Separate Property Tracing

Money earned during the marriage is pretty straightforward as it is considered marital property and divided as such. What about money or real property your client had going into the marriage? What about gifts or inheritance? This makes some cases a little more complicated. The burden of proof is on the party with the separate property claim so you may need some help proving it. This service is available for cases nationwide at very reasonable rates.

How do I know if my client needs a separate property tracing?

Did your client start their retirement savings prior to their marriage? If so, unless the pre-marital money has always been maintained in a separate account and no other money was contributed to that account, there is a good chance a separate property tracing will be needed to prove what amount is not marital.

What is the cost of a separate property tracing?

This one is hard to answer.  However, I think the more important question is, what is the cost of not doing a separate property tracing? In many cases, without it, the client is going to have to divide their separate property. Pricing is based on the length of the marriage as well as the amount of documentation that is available. Contact us for additional information.

Pricing for separate property tracing is based on the length of the marriage as well as the amount of documentation that is available to complete the tracing. Contact us for additional information.

Do I need to practice in Ohio to use your services?

No, you don't. In fact, divorce attorneys in New York and Chicago engage our services to benefit from access to our expertise at prices that are more reasonable than our local competitors.

 

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Lifestyle Analysis

A Life Style Analysis verifies the daily income and expenses that the parties incurred during the marriage. It illustrates spending patterns and is a good way to uncover hidden assets.

Uncovering Hidden Assets with a Lifestyle Analysis

Because a Lifestyle Analysis is such a comprehensive process, going through all of one's financial transactions, it often uncovers activity that would suggest hidden assets. For example, it may uncover large purchase activity of which one of the parties was not aware. It could also uncover the unnecessary liquidation and distribution of assets.

Who should obtain a Lifestyle Analysis?

In my practice, a Lifestyle Analysis is most commonly requested when there is a family business and business and personal expenses need to be clearly delineated. However, it's appropriate whenever there is a question of income and expenses.

 

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Pension Valuation

For many married couples, a pension or defined benefit retirement plan is one of the largest marital assets. The value of a defined benefit is determined by evaluating the present value of future cash flows. In other words, the calculation is the value of future pension payments in today’s dollars. In the case of valuing for divorce, the portion of the pension that was earned during the marriage is calculated.

In some cases, the value of the pension is used when negotiating the division of assets. If one party keeps their pension, they might give up another asset to offset it. Alternatively, the parties may do a “deferred division” when each party receives a share of the pension benefit when it’s paid.

Submit a pension request form. All reports are provided within 5-7 business days once payment is made and all information is provided.

If you did not earn social security, while you were earning your pension, consider a social security offset report. The cost is $125.

Submit documents here or via email to leah@greatlakesdfs.com.

Can’t I just find the value on my annual pension benefits statement?

The simple answer is no. Generally, pension plans issue individual benefit statements once a year to each of the participants. If there is an accrued value found on the statement, that does not represent the present value of future cash flows, which is how a pension is valued. It represents the money that was paid into the plan. While you build your pension through service credits, a dollar amount is being accrued, which is what shows on the statement.

The pension plan is designed to be a retirement income plan so that employees continue to receive income after retiring. While there are often several pension benefits, the primary benefit is the income to be paid when an employee retires. Because the main benefit is the future income generated from the plan, that is what is used to calculate the value of the plan.

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