Generally speaking, asset and debt division are going to be reflected by the asset picture that will be seen by the attorney and presented to the court or addressed in mediation. The higher wage earner, oftentimes, will have a larger allocation for debt because they have the ability to pay. Usually, assets will be divided on an equal basis. Kentucky’s statutory scheme calls it an equitable distribution. Equitable is a legal term for fairness. Our courts, in divorce, are called courts of equity, and the court will decide what is fair and what is not fair. At the conclusion of a divorce, the court must review any agreement reached by the parties and make a determination as to whether or not that agreement is fair. Then, the court orders the party to perform the terms of that settlement agreement.
When a person fails to follow the court’s order, they could be held in contempt of court. Assets and debt division is really dependent upon what the asset picture of the parties is. One of the items that clearly is included in the asset picture is retirement accounts: pensions, 401(k)s, and IRAs. Those are holdings and assets of the marriage. Even though those pre-tax retirement instruments are governed by their own specific plans of administration, the courts can direct the plan administrator of the specific entity to divide the plan according to what’s known as a qualified domestic relations order. They have specific language directing how those orders must be drafted and tendered to them, and the court enters orders on them regularly. The court is going to divide those holdings equitably for the other spouse.
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