Your Rights To Retirement Accounts In A New Jersey Divorce
Retirement benefits are often among the most valuable assets a couple owns, yet they are also among the most misunderstood in a New Jersey divorce. People often assume their 401(k) or pension is off-limits because it is in their name alone, but that is rarely the case.
Our Red Bank divorce lawyer explains how state laws apply to pensions, 401(k)s, and other retirement accounts, and steps you need to take to get your fair share.
How New Jersey Law Treats Retirement Accounts in Divorce
When filing for divorce in the New Jersey Family Court, judges apply the equitable distribution principle. Equitable distribution means the court divides marital assets fairly based on the circumstances of the marriage. This rule applies to any retirement contributions made during the marriage.
Under Section 2A:34-23 of the New Jersey Statutes, courts consider a variety of factors when dividing retirement benefits, including the amount of time they were married, each spouse’s contributions, and their individual earnings and assets.
Retirement benefits commonly subject to division in a New Jersey divorce include:
- 401(k) and 403(b) accounts funded during the marriage.
- Traditional and Roth IRAs with marital contributions.
- Defined benefit pension plans accrued during the marriage.
- Military and government retirement benefits.
- Deferred compensation and stock option plans.
Only the portion earned or contributed during the marriage is generally considered marital property. Contributions made before the wedding or after the date of separation may qualify as separate property.
How To Get Your Fair Share of Retirement Benefits in a New Jersey Divorce
Dividing retirement accounts in a divorce is not as simple as writing a check. Most employer-sponsored plans require a Qualified Domestic Relations Order (QDRO). A QDRO is a court order that instructs a retirement plan administrator to pay a portion of one spouse’s benefits directly to the other.
In addition to getting a QDRO, other steps to take to protect your rights to retirement benefits in a New Jersey divorce include:
- Calculate the total amount of retirement benefits your spouse earned over the marriage.
- Determine whether you have retirement plans that may be subject to equitable division.
- For complex pensions or other accounts, consider getting a professional valuation.
- Consider your spouse’s Social Security benefits if you were married 10 years or longer.
- Consider the tax impacts of any distributions.
Dividing retirement accounts is one area where mistakes are especially costly and often irreversible. To protect your rights and your financial future, contact an experienced New Jersey divorce lawyer.
Schedule a Consultation With Our Experienced Red Bank Divorce Lawyer Today
Dividing retirement benefits in a New Jersey divorce requires careful legal and financial planning. At Sanvenero & Cittadino Law Office, our Red Bank divorce lawyer works closely with clients to protect their long-term financial interests and ensure they get what they are entitled to when it comes to 401(k)s, IRAs, pensions, and other assets.
To schedule a consultation, call or contact us online today. We provide trusted legal representation to clients in Shrewsbury, NJ; Monmouth County, NJ; Central New Jersey; and throughout the state.
Sources:
lis.njleg.state.nj.us/nxt/gateway.dll?xhitlist_vq=2A%3A34-23+Alimony%2C+maintenance
irs.gov/retirement-plans/plan-participant-employee/retirement-topics-qdro-qualified-domestic-relations-order