Retirement & Pension
People who are dissolving their marriages often have questions regarding their assets and obligations following divorce, including retirement savings, pensions, and insurance coverage. A knowledgeable attorney can be beneficial in explaining your rights and guiding you through the divorce settlement proceedings. At Lindabury, McCormick, Estabrook & Cooper, our New Jersey family law lawyers have extensive experience counseling Westfield residents and other people throughout New Jersey in a wide range of matters.Dividing Retirement and Pension Plans
In New Jersey, pensions, 401Ks, and other retirement assets are considered marital property subject to equitable distribution in a divorce. Spouses may negotiate the division of their property and assets, including retirement and pensions, and come to an agreement on whether to share in or offset the respective retirement assets of each spouse. If they cannot agree, the court will equitably distribute the assets. The amount of retirement benefits subject to equitable division consists of the assets accumulated during the coverture period, which lasts from the date of the marriage to the date the divorce complaint was filed with the court.
The distribution of deferred retirement benefits and other employee-related retirement plans generally requires a Qualified Domestic Relations Order (QDRO) or similar order from the court, ordering the retirement plan administrator to divide the assets or direct a portion of the assets to one of the spouses as an alternate payee. A QDRO typically provides a formula used to determine the participant spouse’s accrued benefits or vested interest in a pension or other retirement plan. Although a QDRO must be signed by a judge, many divorcing parties negotiate the terms through their attorneys. Many potential issues must be considered, such as any tax consequences, whether a lump sum may be distributed following the divorce, or whether the parties must wait until the participant retires to receive the benefits.Insurance Obligations
There are several legal aspects regarding insurance coverage and divorce proceedings. First, New Jersey law requires that during the pendency of a divorce action, all existing insurance policies maintained by the spouses, including health, disability, home, and life, must continue until a court order provides otherwise. If one spouse is currently enrolled in a health insurance plan covering the other spouse, for example, it may not be canceled until addressed by court order.
Additionally, a spouse who is ordered to pay alimony over a certain term, as opposed to a lump sum payment, must maintain a life insurance policy that will cover the full amount of alimony to be paid by the spouse in the event of his or her death. Finally, in many cases, divorce settlements will contain provisions requiring that one or both of the spouses maintain insurance policies for themselves or pay for the other’s coverage, as well as addressing the parties’ respective obligations regarding coverage for their children. It is important to protect your interests and be aware of these consequences when settling your divorce.Seek Assistance from an Experienced New Jersey Divorce Lawyer
At Lindabury, McCormick, Estabrook & Cooper, our New Jersey divorce attorneys provide individualized representation in divorce proceedings for individuals throughout New Jersey. We can answer any questions you may have regarding high net worth divorces, child custody and support, relocation, and more. Our firm also maintains offices in Summit and Red Bank. Lindabury, McCormick, Estabrook & Cooper can advise residents of communities across Union, Morris, Middlesex, Somerset, Monmouth, and Essex Counties, among other locations. Call our office at (908) 233-6800 or contact us online to schedule a consultation.