QDROs: Dividing Retirement Accounts in New Jersey

When it comes to dividing retirement accounts in New Jersey, one thing you must bear in mind is that NJ is an equitable state. In the event of divorce, assets are shared equitably, through numerous factors such as the spouse’s range of contribution, duration of marriage, age, health, and economic circumstance of both parties.

When faced with a divorce, it is always best to consult an experienced divorce lawyer with a track record of success. You want to be sure that your interests are protected so you can move on with your life. Through the representation and counsel of your attorney, you take a step ahead to protect your financial future.

Retirement Accounts and New Jersey Divorce

A scenario that often proves to puzzle many is when both parties’ accounts differ greatly in values. One party must have made more money during the marriage, while the others stayed at home. Under New Jersey law, both parties are to be treated fairly, especially since it relates to retirement assets.

If you are to claim retirement assets, you will be required to fill the Qualified Domestic Relations Order (QDRO), which creates an alternate payee. It allows the plan to be split into two, where the participant can pay the alternate payee through the same insurance company for smooth transfer of benefits.

Protecting Your Retirement

Indeed, you may not have seen this divorce coming, but you have to get back on track and ensure your interests and financial future are protected. You begin by first working with a QDRO lawyer who will guide you through the processes of the application. 

Since New Jersey is an equity state, the court decides what’s equitable under N.J.2A:34-23, and also the duration of the marriage, age, health, and economic circumstances. The court will decide what is fair after numerous considerations. But due to tax consequences, it is best to allow one party to take a larger portion of the assets. 

How The Actual Division Is Carried Out

If you’re claiming a pension or 401(K) account, you will need an instrument known as qualified domestic relation order. Typically, the alternate payee will have to open an account with the company of the participant account as it facilitates the faster and smooth transfer of benefits.

By working with a family attorney that understands the complexities of your case, you will have a better chance of protecting your interest before the whole ordeal is over. Remember, it’s a process that has an end. If you believe you’re ready, don’t hesitate to give us a Call 718-303-0753 or fill out the form.