Retirement Asset Division Divorce Attorney Ocean County, NJ
Serving Clients across Toms River, Wall, Brick, Point Pleasant, Howell, Jackson, and Ocean County
Contrary to alarmist columns posted on financial websites, most working Americans do have some form of a retirement account. In fact, retirement accounts make up a large chunk of the overall financial assets for many individuals. Much like other assets, retirement accounts are eligible for equitable distributionduring the course of a divorce. There are however a number of specific guidelines and stipulations when it comes to dividing retirement assets due to their high number of federal and tax regulations.
At The Bronzino Law Firm, our retirement asset division legal team understands the process of dividing complex retirement assets. We believe in simplifying the retirement asset division process for our Ocean County clients from towns including Brick, Wall, Point Pleasant, Toms River, Sea Girt, Monmouth County, and across Eastern New Jersey. Our firm does not provide one-size-fits-all legal solutions like some larger firms. Instead, we take pride in working closely with our clients to deliver uniquely tailored legal service that addresses their individual needs and concerns.
Call our office today to speak with a member of our qualified legal team in a free and confidential consultation regarding your divorce and your division of retirement assets.
Toms River Retirement Plan Division Attorney Defines Qualified Domestic Relations Orders
It is important to understand that retirement assets are highly regulated by the U.S. Securites and Exchange Commission (SEC)and the IRS. For this reason, retirement assets can not simply be divided at any time. Taking distributions or withdrawals from most retirement plans carry significant tax implications and incurred penalties. To avoid these issues, your Toms River retirement plan division attorney may seek a Qualified Domestic Relations Order or QDRO.
QDROs are court orders which allow retirement assets to be distributed without the usual tax implications. In other words, your retirement plan distribution during a divorce will not be considered taxable if done through a QDRO. This is significant, as early withdrawal generally carries a minimum mandatory penalty of ten percent on top of owed taxes.
Although some retirement plans are after tax, they still may require a court order for division. These court orders are called Domestic Relations Orders or DROs. In these cases, there are no taxes due at the time of withdrawal, some account types such as annuities will charge heavy penalties if withdrawn early.
Howell Retirement Asset Distribution Lawyer Discusses Qualified and Non-Qualified Plans
A key concept to understand during the equitable distribution process is whether your plan is “qualified” or “non-qualified”. Qualified plans are considered pre-tax. Non-qualified plans are considered after tax. QDROs cover plans which are qualified due to the fact that plan participants still owe taxes at the time they withdraw funds. Common qualified retirement plans include:
Savings Incentive Match Plan for Employees (SIMPLE) IRA
Simplified Employee Pension (SEP) IRA
Common non-qualified, after tax retirement plans include:
Money Market Mutual Funds
Certificates of Deposits (CDs)
What is the Process for Dividing Retirement Assets During Divorce?
There are several options to explore when dividing retirement assets during a divorce. However, there are two primary outcomes: either you and your spouse will use a QDRO or DRO to divide the retirement assets or you will keep the assets with a single holder and use the financial value as a consideration towards the division of other assets.
If a retirement plan division is on the table, our Ocean County equitable distribution lawyer will help you through the legal process, which may include the following:
It will be determined whether or not the retirement assets are eligible for distribution
The retirement assets will be valuated using up to date financial analysis and potentially the testimony of financial experts
Our attorney will help you find a tenable agreement between you and your spouse to divide the retirement assets
Our firm will draft a QDRO or DRO and send it to your plan administrator for pre-approval
We will petition the New Jersey courts to have your QDRO or DRO granted
Once your QDRO or DRO has been accepted, it can be written into your divorce settlement and executed when your divorce is finalized. No matter what your exact circumstances, the retirement asset division process is long and potentially complex. By working with an experienced attorney, you will receive the peace of mind that your financial concerns are being handled with care and attention to detail.
Contact a Brick Retirement Asset Division Divorce Attorney Today
Retirement asset division divorce attorney Peter J. Bronzino, Esq.takes pride in serving clients from local Ocean County communities such as Brick, Point Pleasant, Toms River, Jackson, Wall, Spring Lake, and across Eastern New Jersey. Our small firm size allows us to provide the personalized legal service which our clients need and deserve. If you are looking for a lawyer who will take the time to listen to all of your questions and concerns when it comes to divorce and family law, look no further.
Contact us onlineor call our Brick office by dialing (732) 812-3102 today for a free and confidential consultation with a member of our qualified and experienced legal team regarding your divorce, the equitable distribution of your marital assets, and how we can help to divide your retirement assets.