Filing for divorce not only signifies the end of your marriage, but it also signals the end of any hopes and plans you may have had with your spouse for a future together, including how your retirement benefits will be divided. This can be a scary prospect, particularly if you rely on their income and planned on them continuing to provide for you as you got older and throughout your retirement years. In these situations, which have the ability to affect your well-being and financial security both now and in the future, it is important to have an experienced New Jersey divorce attorney on your side. At the Law Office Of Jordan B. Rickards, we can assist you in getting your fair share of any marital property and assets in your divorce settlement or order, which may include retirement benefits.
Getting Your Fair Share in a Marital Property Settlement
In any divorce case, there are certain issues that must be resolved before your divorce can be finalized. One of the most important-and often disputed-of these is the division of marital property. This applies to any real estate, homes, vehicles, furnishings, or other belongings you earned, acquired, or otherwise accumulated during your marriage, along with any financial accounts, investments, and shares in business you or your spouse possess. It also includes any retirement benefits you or your partner may have contributed to, such as pension plans, IRAs, or 401ks funds through a financial advisor or employer sponsored plan.
Under Section 2A:34-23.1 of the New Jersey Statutes, all marital property owned by the couple is to be divided on an equitable, not equal, basis. This means that rather than simply splitting it down the middle, the judge will aim at having you reach an agreement which is fair to both parties involved. In the event you and your spouse are unable to do so, the judge may issue an order based on the evidence in your case. Factors a judge is likely to consider in determining how marital property, including retirement benefits, should be divided include:
- The length of the marriage;
- The age and health of the spouses;
- Each person’s earnings and income potential;
- Their overall contributions to the marriage;
- Any career or educational sacrifices either party made in support of the other, of the marriage, or in providing for children.
Based on these factors, a judge may rule that you are entitled to a portion of any retirement benefits as part of your divorce settlement.
Issues in Obtaining Retirement Benefits
In attempting to collect on a spouse’s retirement benefits, you will need to make advance plans and have these funds released through your spouse’s employer or the plan administrator. In order to do this, the Internal Revenue Service (IRS) advises that you will need a Qualified Domestic Relations Order (QDRO), which must be obtained from the judge before your divorce is finalized. Without this order, the funds will not be released and you will be required to go back to court, costing you additional amounts in both time and money.
You will also need to determine the best way to take these funds. The IRS advises that a lump sum could subject you to heavy penalties. You may opt to roll these funds over into your own IRA or 401k or defer payments until you reach retirement age. If you have been married for over 10 years and are 62 or older, there are government benefits you need to also consider. In addition to any military pensions, you may also be entitled to a portion of your spouse’s Social Security benefits.
Our New Jersey Divorce Attorney is Here to Help
Matters pertaining to your divorce can impact you for years to come. Before agreeing to any settlements, reach out to the Law Office Of Jordan B. Rickards first. To request a confidential, one-on-one consultation, contact our Miltown, NJ divorce attorney today.