Tag Archive for: divorce

Dividing a Variable Annuity in a West Virginia Divorce Settlement

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When going through a West Virginia divorce, dividing assets can be a complex and challenging part of the process. One particular asset that may need to be divided is a variable annuity. In this blog post, we will discuss what variable annuities are, how they are valued, and the steps involved in dividing them during a divorce settlement.

Understanding Variable Annuities and Their Value

Variable annuities are a type of retirement savings plan that acts like a personal investment tool. They are so common that they are part of many Americans’ retirement portfolios now. When you get a variable annuity, the insurance company agrees to make regular payments to you based on a predetermined schedule. You either make one payment to the company or a series of payments. What you ultimately receive depends on how well your investment choices do. Most variable annuities invest in money market instruments, stocks, and bonds. On top of the monthly payments they pay out, variable annuities also offer a death benefit.

Because of their ability to fund your retirement on an ongoing basis and provide for your beneficiary, variable annuities can be highly sought-after assets during a divorce.

Asset Division in West Virginia

When a couple decides to go their separate ways in West Virginia, the law requires that everything they own together must be divided fairly. This doesn’t always mean splitting things exactly down the middle, but rather, deciding on a division that is just and reasonable. Assets that were gained during the time they were married are usually considered marital property and include everything from houses and cars to savings accounts and retirement accounts.

Numerous factors come into play. These include how long the couple was married, the financial condition of each person after the divorce, and how much each person contributed to the marriage. This approach aims to ensure that both individuals can move forward on somewhat equal financial footing.

Valuing and Dividing a Variable Annuity in Divorce

In a divorce, figuring out the worth of a variable annuity and how to split it between both parties is a crucial step. First off, it’s essential to find out the current market value of the annuity. This step might sound simple, but the fluctuating value of a variable annuity can complicate it. Furthermore, you also have to consider fees, tax implications, and the potential of the fund to perform better or worse in the future.

After knowing what it’s worth, the next challenge is deciding how to fairly divide it. Courts have a couple of ways to do this. Sometimes, they might give the annuity to one spouse entirely, balancing this by giving the other spouse different assets of equal value. In other cases, the variable annuity is divided in an equitable way and the party receiving part of it will need to roll their share of it into a new retirement account.

Tax Implications to Consider

It is crucial to divide a variable annuity as part of your divorce agreement to avoid unnecessary financial penalties and tax consequences. For example, if a couple divides a variable annuity outside of their divorce as an under-the-table agreement, they will likely be hit with a 10% withdrawal penalty and have to pay income taxes on the amount withdrawn. But if the transfer is done via a qualified domestic relations order, the couple can avoid these consequences.

There may be tax implications to consider in the future, and both parties should be aware of their responsibilities and rights when they accept a retirement account as part of a divorce. You should know about any ongoing fees or taxes you need to pay. This is why we often recommend working closely with a qualified financial planner as part of your divorce; you don’t want to lose part of your wealth to avoidable fees and penalties.

Contact Pence Law Firm Today to Start Your Claim

Preparing for divorce in Charleston? The team at Pence Law Firm is here for you. Give us a call at 304-345-7250 or get in touch with us online to set up a consultation. We’re here to learn more about what you’re looking for in your divorce and what you want life to look like moving forward.

Protecting Your Venture Capital Interests in High Asset Divorces

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High-asset divorces come with a variety of unexpected challenges and hurdles that other couples don’t have to handle. Generally, the more money a couple has, the harder it is to split up their assets when they divorce. While a couple of standard means may have retirement accounts, a couple of bank accounts, and a family home to split up, high net-worth couples often have diverse, complex portfolios that are incredibly difficult to value and split up in a fair way. This is especially true when a couple has venture capital interests.

Interested in protecting your venture capital interests in a Charleston divorce? We can help. Call Pence Law Firm at 304-345-7250 to set up a consultation with our team right away.

How Venture Capital Interests Are Treated in Divorce

Depending on when you acquired your venture capital interests, they may be considered separate or marital property in West Virginia. People invest in startups and businesses when they believe in their long-term potential, and once your investments come to fruition, you may enjoy significant financial benefits. However, the time at which you made your investments and when you pulled your returns from your investments may determine how they are split up.

To determine this, pull all of the documentation you have for your investments. You’ll want documentation on where the investment money came from, when you transferred the investment funds, under whose name the transfer was made, and when you expect to collect your returns. Your attorney can use this to help you determine if you will be able to keep your venture capital interests separate or if they will be treated as marital property.

Legal Considerations

In West Virginia, assets that are acquired prior to a marriage or after a couple has separated are generally considered separate property. This is the best outcome for you since separate assets do not have to be divided during divorce. However, if you invested in venture capital funds during a marriage, used marital funds to make your investments, or used the returns to benefit your family, it’s likely that your venture capital interests will be considered marital property.

It’s also important to look at the role that you both played in your venture capital interests. For example, if both parties researched potential investment opportunities, put their names on major purchases, and presented themselves as a united front to business owners, it would be hard for either party to claim that their venture capital investments were their sole property.

However, even if one party was exclusively responsible for handling the business side of the marriage, that doesn’t mean that their venture capital interests would be considered separate property. Even if one party does not make financial contributions to marital assets, their non-financial contributions are enough to warrant a fair division of shared property.

Protecting Your Interests

If you have a significant amount of money invested in venture capital interests, it’s likely that you’re highly motivated to keep those investments to yourself as you prepare for life as a single person. This is why we recommend talking to a Charleston divorce attorney as early as possible in the process. If you’re driven by the value of your venture capital interests, odds are good that your ex-spouse is also interested in getting their fair share of them. By bringing in an attorney early, you can get realistic and practical guidance regarding how likely you are to keep your venture capital investments separate and what you possibly stand to lose during negotiations.

Perhaps you are willing to make other sacrifices during a divorce to keep your venture capital interests separate. For example, maybe you are willing to give up your fair share of the marital home or investment accounts to support a fair division of assets. You can discuss these options and other potential strategies with your lawyer.

Explore Your Legal Options with Pence Law Firm

When you’re ready to move forward with your divorce, it’s time to talk to the high-asset divorce team at Pence Law Firm. We understand that you face unique challenges and that you need experienced legal representation throughout this process. Get started now by calling us at 304-345-7250 or sending us a message online.

Can I Move Out of the Area with My Child After a West Virginia Divorce?

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Divorce brings significant changes in every area of life, and for many, relocation is a necessary transition. But when relocation occurs after a divorce, you have to go through additional legal steps to ensure that you can move with your child. As is the case with any court case that involves children, West Virginia courts put the child’s best interests first and foremost. This may affect whether or not you are permitted to move.

Considering a big move after a divorce? Make sure you protect yourself and cover your bases before making the big move. Call Pence Law Firm at 304-345-7250 to set up a consultation now.

Limitations When Moving

After a divorce, keeping your child’s life as routine and predictable as possible is likely one of your top priorities. Still, sometimes relocation is the best move for your future—and when it is, you’ll need to be familiar with state laws and limitations.

Under state law, a parent who is governed by a parenting plan must provide advance notice of any intended move. This involves filing a verified petition with the court and having that petition served upon the other parent at least 90 days prior to the anticipated relocation. The summons must be served no later than 60 days prior to the move. If you want to file when the relocation is less than 90 days away, be prepared to show that the 90-day requirement is impracticable in your specific situation.

The Child’s Best Interests

The court will always put the child’s best interests first when determining whether or not relocation is the best option for them. As a parent who wants to relocate, the burden of proof is on you; you will need to demonstrate that your moving plans are in good faith and that you genuinely believe that the move will be in the best interests of the child. You must also be able to show that there are no other alternatives available to you.

The court considers relocation to be for a legitimate purpose if it is to:

  • Be close to immediate family members
  • Better meet the child’s health needs
  • Protect the child’s safety or the safety of a family member
  • To pursue an important employment or educational opportunity
  • To be with the parent’s spouse or significant other with whom the parent has lived for at least a year

Steps Required to Move

When you draft your verified petition, you will need to include a variety of information. Your petition should include:

  • The intended relocation date
  • The address of the new residence
  • Why you plan on relocating
  • How custodial responsibility would be changed if the proposed move was permitted
  • A request for a court hearing

Remember that the court will be looking for proof that your petition was made in good faith, so provide all requested information and be clear in your reasoning.

Upon receipt of your petition, the court will schedule a hearing no less than 30 days ahead of the intended move. Both parents will have a chance to make their case to the court, and the court will likely allow the relocation if it is in the child’s best interests and if there are no other options available to the parent requesting relocation.

Creating a New Parenting Plan

If the relocation means that the current parenting plan will no longer be practical, the court date will also involve creating a new parenting plan that allows the non-custodial parent time with the child. This is something you may wish to discuss with your co-parent ahead of the court date, particularly if they are open to the move and are not planning on fighting you. 

The court may want the child to return to the other parent every other weekend, once per weekend, or less frequently, depending on how far away they will be moving. The non-custodial parent may get the opportunity to make up some of their parenting time during summer vacations, holiday breaks, and other long stretches of time without school.

Explore Your Legal Options with Pence Law Firm

If you want to relocate with your child in West Virginia, it’s important to plan ahead and discuss your next steps with the team at Pence Law Firm. We can help you understand the challenges you may face and prepare a compelling case. Give us a call at 304-345-7250 or reach out online to set up a time to talk.

Are Non-Custodial Parents Responsible for College Tuition in West Virginia?

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There’s no shortage of challenges in a West Virginia divorce, and for many couples, children’s college funding is a source of contention. College expenses have increased dramatically in recent years, far outpacing income growth and making college inaccessible for a growing number of college students. It’s important, then, for couples to decide early on how they will cover their children’s college expenses. But there’s a difference between what parents would like to do and what they are legally obligated to do—and that distinction often comes up during divorce.

Learn more about parents’ obligations after divorce, and to discuss your divorce case in greater detail, call Pence Law Firm at 304-345-7250 and set up a consultation.

What the Law Says Regarding College Expenses

While some states have addressed college funding as it relates to divorce, West Virginia has no law on the books outlining a parent’s requirement to cover their child’s college expenses. When child support covers educational expenses, that relate to K-12 expenses, such as private school tuition, school fees, and school supplies.

This doesn’t mean that divorcing parents can’t be required to cover college expenses for their children; it means that divorce proceedings do not automatically require parents to cover their children’s college expenses, regardless of income. But you can still negotiate college funding as part of your divorce agreement, although you may have to give up considerable concessions to do so.

What if College Funding is Important to You?

Finding out that the court will not automatically require one or both parents to pay for children’s college costs can be disappointing, particularly if you’re in a situation where one spouse earns significantly more than the other. This is often the case in high-asset divorces. However, you do still have leverage. There is a lot of room for negotiation in divorce proceedings, and if college costs are a top priority for you, you can approach your divorce negotiations accordingly.

Parents are free to include specific provisions in their divorce settlement agreement. They may choose to require that each parent cover a specific percentage of college expenses, require that one or both parents contribute up to a certain amount each year, outline the specific expenses that are included, and specify how payments are to be made. Unless one or both parents are extraordinarily wealthy, it’s helpful to have a cap on how much either party can be expected to contribute each year—you never know how college costs may increase in coming years.

Navigating College Funding

If you want to ensure that your divorce agreement includes provisions for college funding, it’s important to discuss this with your Charleston divorce attorney as soon as possible. They can look at the assets and income of both spouses, determine the best approach for negotiating college funding, and decide on a strategy that’s most likely to result in a favorable outcome. However, don’t forget to consider your needs as you start this next stage of your life. While it’s important to provide for your children’s future needs, you don’t want to do so at the expense of your own financial stability and well-being.

What if you are unable to negotiate college funding during the divorce process? You may want to help your children plan ahead. On your end, you can look into a 529 college fund that provides you with tax advantages and sets aside money for college. Your child can begin looking for scholarships early on in their education and contribute winnings to their college savings. There are thousands of scholarships available for students, both on a national level and just within the state of West Virginia.

There are also other forms of financial aid that can help bridge the gap between college savings and final costs. Pell grants, forgivable loans, and other options can help your child attend school without excessive student debt.

Plan for Your Divorce with Pence Law Firm

The earlier you begin planning for your Charleston divorce, the more time your divorce attorney has to plan and negotiate on your behalf. Start now by setting up a time to talk to one of our experienced family law attorneys. Just call us at 304-345-7250 or reach out online now.

Are Stock Options Marital Property in a West Virginia Divorce?

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Divorce can be an incredibly complex and mentally demanding process. If you’re going through a high-asset divorce, you may also be struggling with the division of complex and valuable assets. In particular, stock options awarded as part of one spouse’s employment or their role as an executive officer can be difficult to divide fairly.

If you’re wondering how your or your spouse’s stock options may be handled during divorce, it’s important to explore your options and next steps with the team at Pence Law Firm. Call us at 304-345-7250 to set up a consultation right away.

The Timing of the Stock Options

A huge part of determining whether or not stock options are marital property is their timing. You’ll have to look at the documentation regarding when the stock options were granted. For example, if the individual received stock options prior to getting married, it’s possible that those stocks will be considered separate property—but that’s not guaranteed. We’ll discuss complicating factors below.

If stock options were awarded to one party during the marriage, it’s more likely that those stocks would be considered marital property and would be divided equitably between both spouses as outlined under West Virginia law.

Even if stock options are considered separate property because they were awarded prior to marriage, they may ultimately become marital property if they increase substantially in value during the marriage. Consider, for example, a CEO with extensive stock options. Many of their stocks were granted prior to marriage. However, after getting married, they made major changes within the company that led to the stocks increasing dramatically in value. The other spouse may claim that this increase in value was due to their work at home which allowed their spouse to focus more on their work.

The Vesting Schedule of the Stock Options

However, it’s more complicated than that. You can’t just look at when the stock options were granted—you must also consider when the stock options became fully vested. The vesting schedule refers to when the employee in question is permitted to exercise those stock options. 

For example, if an employee receives a set number of stock options and a percentage becomes vested after two years, the employee can only actually access the partial value of those stocks after two years. 

As you may imagine, this becomes complicated if the marriage ends before all stocks become vested. If the employee has stock options that fully vest over a period of five years but divorces their partner three years in, the court may determine that 60% of the stock options are marital property. This becomes even more complex if the employee receives stock options each year as part of their bonus or general compensation, as each year’s set of stock options will be vested at different levels at the time of divorce.

The Role of the Stock Options in Employment

Another factor you must consider is why the employee receives the stock options in the first place. Perhaps the spouse in question is an executive who made cost-saving cuts during the year. As a reward for their efforts, they receive stock options as part of their year-end bonus. These stock options are compensation for work already completed.

In another example, an employee is working for a startup. The pay is lower than market standards, so in order to encourage employee retention, employees receive stock options that they can only exercise if they stay with the company for a set period of time. In this scenario, the stock options may be considered compensation for future work.

The reason you receive stock options may determine whether or not they are marital property. If they are compensated for work already completed and that work occurred during the marriage, those stock options could arguably be considered marital property. If the stock options are granted during the marriage but they are compensation for work completed after divorce, they may be viewed as separate property.

Facing Divorce? Contact Pence Law Firm Today

This is clearly a complicated and multifaceted issue in your Charleston divorce, so it’s important to explore your specific situation with a family law attorney. Set up a consultation with Pence Law Firm now by calling us at 304-345-7250 or reaching out to us online.

The Growing Issue of Cryptocurrency During a Divorce

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While cryptocurrency has brought an entirely new group of investors to the world of finance and provided new investment opportunities, it has also made a number of issues more complicated. In particular, divorce can be especially challenging when one party invests a substantial amount of money in cryptocurrency. Cryptocurrency is naturally harder to track than more conventional types of currency, and if one partner doesn’t even know that they should be looking for cryptocurrency, they could get a smaller share of the marital assets than they deserve.

That’s why it’s important to work with a Charleston divorce attorney with extensive experience in cryptocurrency and other trends that may affect the outcome of your split. Call Pence Law Firm at 304-345-7250 to set up a consultation with our team at your earliest convenience.

Volatile Value

One of the most difficult aspects of cryptocurrency is its constantly fluctuating value. While stocks are also prone to dramatic drops and increases, these types of drastic changes are far more commonplace across the realm of cryptocurrency. This can make it extremely difficult to get a fair valuation on cryptocurrency, as its value during negotiations could be significantly higher or lower than its value when the divorce is finalized. Any massive change in value could require an entirely new division of assets in order to preserve the split of assets previously agreed upon.

Identification and Tracing

In many cases, even identifying and finding cryptocurrency can be a challenge. This is where it’s often helpful to turn to a forensic accountant with experience in cryptocurrency and digital assets. Those who spend a substantial amount of money and time on their cryptocurrency trades may have multiple wallets in which they keep their crypto, which can make it easy to “disclose” some assets while actually having the majority of them stashed away. 

This is especially risky when one partner is heavily into cryptocurrency and the other knows almost nothing about it. Furthermore, it is relatively easy to trade cryptocurrency multiple times in quick succession, which makes it far harder for outside parties to trace the transactions and figure out where the money ultimately ended up.

Disclosure and Hidden Cryptocurrency

The novelty of cryptocurrency means that the divorce courts haven’t quite caught up with it. Many individuals are relying on their spouses to do the right thing and disclose their assets, including those they would otherwise not know about—and that is not a risk you want to take when your financial future is on the line. 

If you don’t know that your spouse dabbles in cryptocurrency, there could be tens of thousands of dollars of assets that you don’t even know about. The good news is that those who are into cryptocurrency are often fairly talkative about it, so unless they’ve been trying to hide these assets from you from the very beginning, there’s a good chance you’ll know about their investments.

Division of Cryptocurrency

Fairly dividing cryptocurrency can be a point of contention during a divorce. First, there’s the issue of fair valuation, which we discussed earlier. Second, once you agree upon a split, you have to decide what to do with the cryptocurrency. There’s a very real possibility that the spouse who was previously uninterested in cryptocurrency is still uninterested, and they won’t want to go through the steps of making a wallet and getting set up on a trading platform. However, simply exchanging the cryptocurrency for cash can trigger additional taxes for the party who does the trading, which further complicates the division of assets. 

Offsetting the value of the cryptocurrency with another asset is a common solution. Not only does it allow the crypto-interested partner to keep their cryptocurrency and let it keep growing, but the party without any interest in cryptocurrency can get their share without having to learn an entirely new vocabulary.

Choose Pence Law Firm for Your Divorce

Wondering about how cryptocurrency will affect your divorce and the division of your marital assets? The team at Pence Law Firm can help you explore your options and come up with a plan. Reach out online or call us at 304-345-7250 to set up a consultation with our team of experienced divorce lawyers.

Viewing Divorce as a Growth Experience

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No one gets married with a plan to divorce in the back of their mind, but divorce is the reality for nearly half of all American couples. While it’s normal to grieve the end of your marriage and the dreams you had for it, divorce can also be a fresh new beginning. Many people give up parts of themselves to help their marriage survive, and the end of the marriage is a chance to bring those parts back to life.

Learn more about treating divorce as a growth experience, and when you’re ready for help with the legal side of your divorce, call Pence Law Firm at 304-345-7250.

Societal Views on Divorce Have Changed Over Time

While divorce has never been fun, it’s definitely easier now than it used to be. In the past, divorce was viewed as such a grave mistake and dereliction of duty that it essentially ended one’s reputation and future opportunities. Now, since divorce is so common and no one’s forced to stay in a relationship that does not serve them, you won’t even get a surprised look when you tell people you’re divorced. In fact, you’ll likely find new friends who have been in the same boat and know what you’re going through. Not one do you have your already-existing support group, but you can actually use this experience to broaden your social circle.

Divorce as a Vehicle for Self-Discovery

Divorce can be a good way to propel your discovery of yourself. Think about your marriage—what did you give up? It may be hobbies, activities, or interests that your spouse didn’t like, didn’t find appropriate, or simply didn’t prioritize. You may have put your own interests to the side to support your spouse in their endeavors, resulting in a slow loss of self. This is your second chance to figure out what matters to you and how you want to use your life. It doesn’t even have to be hobbies and activities you used to enjoy; you could discover something entirely new to you.

Setting Yourself Up for Emotional Healing and Resilience

As you navigate this path, recognize that healing is not linear. You may feel great one day, only to wake up the next day feeling like you took ten steps back. That is completely normal, and you want to set yourself up with the support you need to get through the tough days. That means being gentle with yourself when you take a step backward or understanding when you need to take a day off to cry and lay on the couch. It may also mean getting the mental health support you need. Divorce is a traumatizing experience, and many people benefit from professional assistance as they work their way through it.

Creating Strong Support Networks

The people in your life likely want to support you during this difficult time. It’s normal to want to work through it on your own; some people even feel ashamed of their divorce and don’t want to let other people in. But turning to the people you trust doesn’t just help you process your divorce more easily—it also strengthens your bond with them and gives you the foundation you need for this next chapter of life. Prioritize your friends and family members and don’t be afraid to call someone when you hit a hurdle in your healing.

Building a Future You Can Look Forward To

Life without a spouse means that you have room to grow and build a life that fits your goals. You don’t have to make any life changes right now; in fact, experts often recommend that you don’t. But you do have time to start brainstorming and thinking about what you want life to look like in five, ten, and twenty years from now. You can also start planning the steps you need to take to make this chapter the best one yet.

Find Out How Pence Law Firm Can Help You

At Pence Law Firm, we are committed to helping people like you work through the challenges of divorce. From the division of assets and spousal support to child custody and child support, we’re here for all of it. Set up your free consultation now by calling us at 304-345-7250 or sending us a message online.

How Inheritances Impact Alimony Payments

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In West Virginia, the number of factors affecting spousal support can make it hard for parties on both sides to understand their rights and obligations. This issue becomes even more complicated when you throw an inheritance into the equation. Whether you receive or pay spousal support, find out how an inheritance could change your current agreement. For personalized legal advice regarding your spousal support agreement in Charleston, call Pence Law Firm at 304-407-7852.

When an Inheritance is Received Prior to Divorce

In general, inheritances are considered separate property—even when they are received during a marriage. This may change if the inheritance is commingled. For example, let’s say Spouse A receives $100,000 from an inheritance. They do not put it into a separate account that’s only in their name, instead, they put it into their shared bank account. 

The couple draws on it for years to pay family bills and expenses. At that point, the inheritance may be considered commingled and would be divided accordingly during a divorce. But if it is kept separate, it could still affect spousal support. If a lower-earning spouse has an inheritance, that could decrease the amount of spousal support they receive or eliminate it entirely. If the higher-earning spouse has one, their spouse may receive more in the way of spousal support and the division of marital property.

One topic that comes up from time to time is a promised inheritance. For example, imagine that one spouse is set to receive spousal support. The paying spouse insists that they should not have to pay because the receiving spouse will receive a massive inheritance when their family member dies. The court doesn’t consider future or potential inheritances—it will only look at what is already paid out.

Paying Alimony After Receiving an Inheritance

What if you receive an inheritance after a divorce and you’re currently paying spousal support to your ex? Many people worry at this point that their good fortune could mean giving some of it up to their ex-partner. However, it’s unlikely that an inheritance would put you on the hook for more alimony. If the court were to increase alimony, the payee would need convincing proof that their circumstances changed in a way to require an increase.

Another important factor to consider is what happens if your inheritance is enough to live on and you stop working. Even if you no longer have a standard source of income, you will likely still have to make alimony payments per your court order. When you give up your income willingly, the court knows that you are capable of earning what you made at your previous job, and they do not typically adjust spousal or child support accordingly.

Receiving Alimony After Securing an Inheritance

Depending on the terms of your alimony agreement in West Virginia, your alimony payments may change if you receive an inheritance. Rehabilitative spousal support is intended to help the payee make it until they are financially stable on their own. Generally, that means becoming gainfully employed or marrying someone who can support you. However, if you inherit enough to be financially self-sufficient, your ex may have grounds to ask the court to terminate alimony payments.

This isn’t always the case. Perhaps the court-ordered spousal support in gross, and you are entitled to a certain amount. Instead of paying it in a lump sum, your ex chose to have it divided up over 60 payments. Even if you become self-sufficient in the third year, you’re likely still entitled to the lump sum agreed upon in your divorce. In this scenario, the court may not terminate spousal support payments.

It all comes down to when you inherit, how much you inherit, and the specific language used in your divorce agreement. That’s why it’s important to discuss your situation with a Charleston family law attorney and get advice that fits your needs.

Get Help with Your Post-Divorce Issues Now—Call Pence Law Firm

If you or your ex-spouse have received an inheritance and you’re worried about its effect on spousal support, let the team at Pence Law Firm explain your rights and obligations. To schedule your consultation, just contact us online or call us at 304-407-7852.

Navigating the Complexities of Divorce and Pensions

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The division of assets can be a challenging part of your West Virginia divorce, particularly if you and your spouse have pensions or retirement accounts. These are often among the most valuable assets a couple has to divide, so they can be the subject of bitter disputes. If you or your spouse have a pension to split, learn what to expect and what your options are.

Having the right legal counsel during your divorce can make a significant difference in the outcome. Call Pence Law Firm at 304-407-7852 to set up a consultation with our team right away.

The Division of Marital Assets in West Virginia

As is the case with most states, West Virginia is an equitable distribution state. Rather than assuming that all property acquired during a marriage will be split down the middle during a divorce, the principle of equitable distribution aims to split up property in a way that is fair to both parties. A number of factors are considered in these decisions, such as both parties’ earning ability, separate assets they may own, and their contributions to the marriage. Since West Virginia is an equitable distribution state, your pension could be split up in any number of ways, depending on what you agree upon.

Issues to Consider with Pensions

Compared to other types of assets, pensions can be fairly complicated. It’s not as easy as splitting it down the middle and giving part to each spouse. The value of a pension may fluctuate, and pensions also have different structures. For example, a defined benefit plan gives the recipient a set monthly amount after their retirement. However, defined contribution plans may fluctuate in value, depending on the investments chosen. These can be much harder to divide. Finally, you have to consider government pensions, which are generally bound by strict laws and regulations that further complicate this process.

There are several ways you may choose to divide a pension during a divorce—we’ll explore some of those options in greater detail.

Splitting Up the Pension

Pension sharing is a popular option for those who want a clean break after a divorce. With a QDRO—or qualified domestic relations order—the person receiving part of the pension must then transfer their share into their own retirement account. If they do not roll the funds into another retirement account, they may be hit with a heavy financial penalty. 

The amount that is up for division depends on how long the pension has been accumulating and the length of the marriage. If the partner who earned the pension started there before getting married, at least part of the pension will not be subject to division. If they were married for the entirety of their career, the entire pension may be subject to division.

Offsetting Pension Shares

It’s common for the person who earned the pension to want to keep it in its entirety. Pensions can be incredibly valuable, as they often grow in value the longer you remain with a workplace. If the person who owns the pension does not want to split it, they may choose to compensate the other party by offsetting their share of the pension. For example, if they agree on the other party receiving $100,000 of the pension, the person who owned the pension may instead give up $100,000 of their share of the marital home to account for that loss. This way, they do not actually have to break up the pension and diminish its value.

Regardless of how you decide to split up a pension, securing a fair valuation is crucial. While some types of pensions are easy to value, others change with time and with changes in the stock market. Both parties benefit from a fair valuation from a qualified professional.

Get the Legal Support You Deserve with Pence Law Firm

Divorce is never easy, but the right legal team can streamline the process and help you move forward. At Pence Law Firm, we help divorcing individuals all over the Charleston area prepare for their next steps in life. To find out how we can help you, call us at 304-407-7852 or send us a message online.

Understanding QDROs and the Division of High Value Retirement Accounts

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In many divorces, the division of assets is the most complex and time-consuming part of the entire process. It’s especially hard in long marriages where both partners have built up assets and completely intermingled their financial futures. Retirement accounts can be particularly challenging to divide, due to their significant value and their propensity for growth. The use of Qualified Domestic Relations Orders can streamline the division process and ensure that the divorcing couple doesn’t incur any unexpected penalties or taxes.

If you’re preparing for divorce in Charleston, working with an experienced divorce attorney can save you time, money, and stress. Set up a consultation with Pence Law Firm now by calling us at 304-407-7852.

What is a QDRO?

A Qualified Domestic Relations Order is a legal order that specifies the way in which pensions and retirement plans are divided during a divorce. This is due to the fact that you often cannot simply withdraw from your retirement account and give your ex-spouse the amount they’re entitled to under your divorce agreement. 

Early withdrawals from retirement accounts can result in heavy penalties and taxes. In this situation, you aren’t taking from your retirement account to use it prior to retirement—you are just giving your ex-spouse what they are entitled to. For that reason, you want to protect the value of your accounts and avoid mishaps by using a QDRO. Furthermore, both state and federal laws have specific rules about how retirement funds can and cannot be accessed. A QDRO ensures that your division of these accounts is compliant with all relevant laws.

When a QDRO Is and Isn’t Required

While a QDRO is a useful tool in a divorce, it isn’t always necessary. It’s crucial to work with a knowledgeable divorce attorney who can use the right tools and legal orders to streamline your division of assets. In general, accounts that are governed by the ERISA (Employee Retirement Income Security Act) do require a QDRO. Per ERISA, retirement interests can be split up only if there is a judgment, decree, or order that can be considered a Qualified Domestic Relations Order. If your retirement account is from an employer-provided retirement plan, there’s a good chance you’ll need a QDRO to split it up without legal or financial issues.

However, there are retirement accounts that do not require a QDRO. In these situations, you can split up your retirement account as long as it is specified in your divorce agreement. Retirement accounts not requiring a QDRO include IRAs, some government retirement plans, and some specific types of pensions and annuities. However, there are rarely hard and fast rules when it comes to money and divorce, so it’s best to discuss your specific accounts with an attorney.

Note that whether or not your accounts require a QDRO, the money transferred between spouses will likely need to be handled in a very specific way to avoid financial penalties. For example, an IRA must be divided up in the divorce decree. The funds that are transferred must then be transferred into the receiving spouse’s own IRA. If the receiving spouse simply takes their share in cash and holds onto it, they will likely owe federal income taxes on it and pay a 10% penalty.

Determining Each Party’s Share

A big part of this is determining what each spouse is entitled to during divorce. Much depends on when the account was created and when money was added to it. If one spouse came into the marriage with money in their retirement account, that amount may be considered a separate asset. However, the rest may then be subject to division. If the entirety of the account was earned while the couple was married, the whole account will likely be subject to division.

Plan for Your Divorce with Pence Law Firm

Divorce can be complicated, and you’re bound to have lots of questions. When you choose Pence Law Firm, you’ll have quick access to experienced attorneys who are ready to help you with your West Virginia divorce. Get started now by calling us at 304-407-7852 or reaching out to us on our website. We’ll get your free consultation scheduled and start planning.