Everything between a couple during a marriage is eligible for spouses to negotiate during the division of assets. One of the biggest assets that most couples share is retirement funds, which may be a contentious part of negotiations. Until a recent court ruling was made, financial advisors may have advised clients that retirement funds divided after a divorce were protected in the event of filing for bankruptcy. Missouri family law attorneys may have new advice for clients, following a new court ruling.
The court ruling is the result of one man attempting to protect his retirement funds from creditors. The man obtained half of his wife’s 401(k) and all of her IRA in the property division. Following the divorce, the man apparently filed for bankruptcy and expected his retirement funds to be protected from creditors, as has been the case for many in the past.
At some point, the man ended up in court, fighting to keep his retirement accounts protected, but a court ruled that they were not always excluded in the event of bankruptcy. The case made it to the U.S. Bankruptcy Appellate court in the 8th Circuit, which includes the state of Missouri. The panel of judges upheld the lower court’s ruling, and it has set a new precedent.
Precedents and laws can change frequently, making it difficult and overwhelming for some individuals to understand the right way to approach a divorce and how it will affect them in the aftermath. Family law attorneys in Missouri are informed of all law changes and rulings to best advise clients of property division. In addition, attorneys can direct clients to skilled experts as needed.