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Property division, retirement accounts impacted by court decision

In a divorce case in North Dakota, there are a litany of issues that will be of concern and in dispute. For those who have significant retirement assets, the high asset divorce process can be complex and worrisome for both the person who has the account and the other party. Both sides will want a fair share. Part of dealing with this is to keep track of court rulings regarding how the law deals with them. A recent decision makes it imperative to re-assess how retirement assets are handled.

When a person receives retirement assets as part of a divorce settlement, a later filing of bankruptcy can negatively impact the funds in the account. This can be problematic for the spouse who received it. In general, if the account is a 401(k), it will be shielded should there be a bankruptcy. In addition, the IRA is protected up to $1.3 million based on a capped amount that is adjusted based on inflation. This leads to some financial advisors mixing the funds with other assets the clients might have. With the recent ruling, however, that could be placed in jeopardy with a bankruptcy.

A precedent was set after a man got half of his wife's 401(k) and the entire IRA. He later chose to file for bankruptcy and stated that those funds should be off limits to creditors. After a ruling from a lower court, a higher court upheld the ruling saying that the funds could not be exempted. This ruling applies to states in the 8th Circuit, of which North Dakota is a part. This should be a consideration when a couple is divorcing and has these plans with the parties battling over them with the possibility that a bankruptcy might be needed in the future.

Property division can encompass many areas, including motor vehicles, homes, sentimental items, bank accounts, retirement accounts and more. Oftentimes, especially in high asset cases, these are part of a contentious proceeding with both sides wanting as much as they deem is fair. This ruling could impact the retirement accounts and factor in as to whether the parties will contend for them as intensely as they did before. Getting the right information about family law may help.

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Commandments of Family Law

  1. The only truth your children need to know is that you both love them unconditionally, and that this isn't their fault.
  2. Take the high road — everyone wins when you do what's best for your kids.
  3. Negotiate but don't capitulate — if you are being pushed toward something detrimental for your children, stand your ground.
  4. You can only control yourself and how you respond. Don't engage.
  5. Do set up rules and responsibilities. Kids feel better when routine is continued.
  6. You are still their parent — don't be afraid to be one.
  7. Disneyland is in California, not in your home. Don't set up unreasonable expectations.
  8. It is not their job to take care of you. Repeat that to them. Often.
  9. Yelling is for sports — not court. Good lawyers strongly advocate without being disrespectful to opposing parties.
  10. Fair is a place you go to get cheese curds. Aside from that, nothing in life is fair.

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