When you are facing a divorce, retirement is likely the last thing on your mind. However, retirement benefits are valuable and can ensure your financial stability in the future. It’s important to understand that you may be entitled to a share of your retirement benefits in your divorce. Please continue reading to learn how your retirement savings could be divided in your divorce settlement and how a dedicated Suffolk County Divorce Attorney can help protect your interests.
Is New York an Equitable Distribution State?
First, it’s important to understand that New York operates under an equitable distribution model. This legal principle governs how marital property is divided between spouses during a divorce. Essentially, the courts will consider a variety of factors to determine a fair distribution, though not necessarily an equal split. These factors include:
- The length of the marriage
- Each spouse’s contributions to the marriage
- Each spouse’s income and earning potential
- Each spouse’s financial needs
- Each spouse’s ability to earn a living in the future
- The value of the marital property
- Any agreements (prenup or postnup)
- Any other relevant factors
While retirement accounts are typically held individually, they may be subject to division in the event of divorce. Even though your spouse may be named as the beneficiary of your retirement account, the plan is owned individually and not jointly.
How Does a Qualified Domestic Relations Roder (QDRO) Work?
Assets in qualified retirement plans are typically divided during divorce proceedings through a qualified domestic relations order (QDRO). The Internal Revenue Service (IRS) defines it as a “judgment, decree, or order for a retirement plan to pay child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent of a participant.”
It’s important to note that if you believe you are entitled to a share of your spouse’s retirement savings, you will need to specifically request one in your divorce settlement agreement. You must initiate the process as you will not automatically receive one without asking the court for it. This court order instructs how to distribute a portion of the plan participant’s benefits to their former spouse.
Marital property, meaning any assets acquired during the marriage, are subject to equitable distribution. In most cases, retirement plans are considered marital property, and thus subject to equitable distribution. This typically includes 401 (k)s, IRAs, and pensions.
If you are facing a divorce in New York, you have a lot at stake. As such, it’s in your best interest to enlist the help of a determined attorney from The Law Office of Susan A. Kassel, P.C. who can advocate for your rights and aggressively represent your interests at every turn. Connect with our firm today to discuss your case.
