Law Offices of Peter G. Aziz & Associates LLC
973-928-0577
Serving Legal Needs
In New Jersey.

Dividing 401(k) and other retirement assets in divorce

New Jersey residents who are approaching or going through divorce are likely to have disagreements about financial matters. According to a survey conducted by the American Academy of Matrimonial Lawyers, the top things divorcing couples fight about are alimony, business interests and retirement accounts. When it comes to dividing 401(k) assets, couples can sometimes make mistakes. Here are a few things to keep in mind when splitting up a 401(k).

If one spouse has a retirement plan through his or her place of work, the only way for the other spouse to claim part of the funds is via a qualified domestic relations order, also known as a QDRO. Typically, an attorney will put the QDRO together and submit it to the judge for approval. It is a separate legal document from the divorce decree, but its terms are based on the divorce decree. A QDRO is required to split the assets in a 401(k) or a traditional pension plan.

A QDRO is not necessary to divide the assets in an individual retirement account whether it is a Roth IRA or a traditional IRA. Rather, for division of an IRA, the terms will typically be included in the divorce decree. Individuals should be careful, though, and not simply withdraw IRA funds and give them to the ex-spouse. Such an action is likely to be treated as a taxable event for the party making the withdrawal. A trustee-to-trustee transfer should be made instead.

In a case when a New Jersey couple is divorcing, an attorney with experience in divorce law may help identify assets and liabilities of the parties and negotiate the terms of the property settlement. An attorney might create a QDRO that meets the approval of the court or argue on behalf of the client during family court proceedings.

No Comments

Leave a comment
Comment Information
Contact the Firm

Request A Free Initial Consultation

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

1115 Clifton Ave.
Suite 204
Clifton, NJ 07013

Phone: 973-928-0577
Fax: 201-497-2013
Clifton Law Office Map

1 Kinderkamack Road
Suite 104
Hackensack, NJ 07601

Phone: 973-928-0577
Fax: 201-497-2013
Map & Directions