Dividing Retirement Assets In A Divorce
At Koiles Pratt Family Law Group, we fight to secure retirement assets and pension plans during divorce. However, before you come into our office, it is helpful to have an idea of how retirement assets are divided so that you know your options. Here are important aspects of retirement asset division to know before attending your case assessment.
Domestic Relations Orders (DROs)
DROs are court orders that specify how retirement and pension plans will be divided in a divorce. The purpose of a domestic relations order is to ensure that when retirement assets are transferred, there will not be a tax effect.
Sometimes, a qualified domestic relations order (QDRO) is necessary. Only plans that qualify under the Employee Retirement Income Security Act (ERISA) require a QDRO. Examples of retirement accounts that require QDROs include 401(k), 457, 403(b) and profit-sharing plans. Our attorneys can explain your options for protecting your assets.
How Retirement Plans Are Divided
Any contributions or distributions made to or from a retirement and pension plan during marriage are considered marital assets. Any contributions or distributions made before or after a marriage may be classified as separate assets and may not be subject to division.
For example, if you opened a retirement plan at age 20, married at 25 and divorced at age 40, any contributions that were made between ages 25 and 40 would be marital assets.
Marital assets are divided in court in accordance with Massachusetts’ equitable distribution laws. Equitable distribution does not necessarily mean equal, but rather what the court deems fair and reasonable. Equitable distribution laws do not apply to settlements that are made outside of court. Keep in mind, however, that settlements reached out of court still require a DRO or a QDRO that is approved by the court.
Contact A Salem Attorney Experienced With QDROs
Our skilled lawyers can ensure you do not miss key deadlines or overlook costly tax implications. Safeguard your retirement assets and schedule a case assessment with a qualified lawyer by calling 978-744-7774or sending us a message online.