A Nassau County QDRO divorce lawyer can help you if you anticipate that a pension will be split during a divorce. The equitable distribution of property including pensions can have a significant impact on your financial life after your divorce is concluded. You may hear the term QDRO and not understand what it means, but a QDRO divorce lawyer in Nassau County can help you to understand its implications. This is one of the most important issues to come out of your divorce settlement or trial, so it should be taken seriously.
A QDRO divorce attorney in Nassau County is one of the most important people you will interact with over the duration of your case because the division of such a pension can make or break your own retirement.
The determination of each spouse's rights to retirement accounts and pensions could be extremely complex during a New York divorce. Although the domestic relations law in New York categorizes pensions as marital property, experienced attorneys are familiar with the many ways that sorting out retirement and pension rights can complicate the divorce process and add to an already difficult situation.
Working with a knowledgeable lawyer who has helped to develop these documents in the past is the best way to avoid problems. Retirement plans may be categorized as qualified, if the plan is covered by the ERISA law or non-qualified, if it is not governed by that law.
The only way for a qualified plan to be divided as a means of a New York divorce is using a Qualified Domestic Relations Order, also known as a QDRO. Qualified domestic relations order is required under the law in order to receive the benefits inside a pension account. It is not enough to use the divorce decree itself to show that a party is entitled to a pension amount. Instead, it must be documented in the divorce decree as well as in a qualified domestic relations order that has been accepted by the plan administrator to move forward with the court.
Couples can divide the assets that have been reserved for retirement proportionally without any tax liability under ERISA. Whether your retirement plan is a defined benefit plan or a defined contribution plan, it will require a qualified domestic relations order that the judge signs and that the plan administrator accepts in order to divide the marital portion of the fund. The discovery of pension plans is important in your divorce and should be taken seriously.
This is separate from and comes following a separation agreement. The plan provider without a QDRO can split up the plan in whatever amount that the parties agree to or whatever a judge decides to set. Typically, an alternate payee will put together a rollover IRA for their portion. The transfer from the planned participant to an alternate payee typically is not taxed, however, there can be tax consequences for the early withdrawal.
There are several different issues that can emerge when handling a defined contribution fund. An employer contribute to that fund up to one year later.
Dividing a defined benefit plan resembles the process for dividing a traditional pension that puts aside a payment to be received monthly at the time of retirement because the participant does not always contribute to the plan. Qualified domestic relations orders are required and should be taken very seriously by an experienced lawyer as soon as they have been assessed in a divorce decree. Your lawyer will be able to review all the details to make sure that your best interests are always represented and included in the proper paperwork to end your divorce and get retirement benefits.