If you are going through a divorce, you may be worried about dividing retirement plans between you and your spouse and if it considered equitable distribution. Here is what you need to know.
Dividing Retirement Plans | What Am I Entitled To?
Retirement plans are among the most difficult areas for my clients to wrap their heads around. For example, I have many cases where one spouse may have been a long-term employee of New York State or the Federal Government and, during the course of a long-term marriage, acquired some substantial retirement benefits such as a defined benefit plan that will pay out when that person retires or a deferred compensation plan, like a 401(k). Oftentimes, when these people come to me, they are surprised to learn that they must share that asset with their spouse – even though they were the ones who worked in the employment that earned that asset.
Yes, retirement assets are divided between the parties in a divorce, and sometimes they’re the most valuable asset. Be prepared to accept the fact that there will be some distribution of that asset, whether it takes the form of a direct division or a set-off against another asset. Don’t hold on to the impression that, just because you worked and earned that asset (in fact, maybe your spouse didn’t even work at all), you won’t have to share it.
Dividing Retirement Plans | Equitable Distribution
New York State’s equitable distribution law dictates the division of assets in a marriage. It also dictates the division of debt. Basically, the law views everything acquired during the marriage as marital and subject to being divided fairly, although not necessarily equally. This applies to all assets and debt acquired during the marriage, regardless of title. The most popular assets include homes and retirement benefits. Also, many people have debt, including credit card debt, which will also be divided without regard to its title. Four categories of property are considered separate property, and not subject to division as marital property, even though some of them might have been acquired during the marriage. These categories are: an asset you owned before you were married, an inheritance, a gift to one of you from a third party, or the proceeds of a personal injury lawsuit settlement.
Dividing Retirement Plans | Qualified Domestic Relations Order
A qualified domestic relations order, sometimes referred to as a domestic relations order, may be required to divide a couple’s retirement assets. This term is very common and will be heard during the divorce process. After a divorce is complete, if you are entitled to part of your spouse’s retirement, your agreement or decision will probably require you to obtain the qualified domestic relations order. You will need an attorney to help you with this process and should have it completed and filed with the employer as soon as possible. I have experience in this area and routinely prepare qualified domestic relations orders. I would welcome your call if you wish to discuss a qualified domestic relations order, even if your divorce is already complete.
If you are looking for a Buffalo divorce lawyer to help with dividing retirement plans, please call us today!