Wilson Family Law LLC, 667 Shunpike Road, Suite 5, Chatham, NJ 07928
Aside from the huge emotional toll of a divorce, one of the most difficult tasks when getting divorced is learning to grasp the division of your assets. Marital property is defined as the assets and debts acquired during your marriage, beginning from the date of marriage until the date the complaint for divorce is filed. This includes pension accounts held by a spouse. New Jersey is an equitable distribution state, which means that all marital assets will not necessarily be split in half; rather, they will be “equitably” split based on the following factors set forth in N.J.S.A. 2A:34-23.1:
a. The duration of the marriage or civil union;
b. The age and physical and emotional health of the parties;
c. The income or property brought to the marriage or civil union by each party;
d. The standard of living established during the marriage or civil union;
e. Any written agreement made by the parties before or during the marriage or civil union concerning an arrangement of property
distribution;
f. The economic circumstances of each party at the time the division of property becomes effective;
g. The income and earning capacity of each party, including educational background, training, employment skills, work
experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary
to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably
comparable to that enjoyed during the marriage or civil union;
h. The contribution by each party to the education, training or earning power of the other;
i. The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value
of the marital property, or the property acquired during the civil union as well as the contribution of a party as a homemaker;
j. The tax consequences of the proposed distribution to each party;
k. The present value of the property;
l. The need of a parent who has physical custody of a child to own or occupy the marital residence or residence shared by the
partners in a civil union couple and to use or own the household effects;
m. The debts and liabilities of the parties;
n. The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a
spouse, partner in a civil union couple or children;
o. The extent to which a party deferred achieving their career goals; and
p. Any other factors which the court may deem relevant.
One of the most valuable assets acquired during the marriage is the balance of the pension account. Although it may seem unfair that contributions made to your pension are subject to division, the pension is considered marital property because it was earned during the course of your marriage. However, it is important to note that the balance prior to your marriage is not considered divisible property. Therefore, it is crucial to obtain documentation of the balance pre-marriage. Further, once the Complaint for Divorce is filed, any contributions made after that date (as your divorce is still being finalized) are not considered marital property.
What are Qualified Domestic Relations Orders (QDROs)?
Qualified Domestic Relations Orders (QDROs) are specialized Court Orders used to divide retirement accounts in a divorce. They outline how the benefits will be split and are an essential step to ensure that the division of your pension (or any ERISA-controlled retirement accounts) does not violate any Employee Benefits Security Administration (ERISA) rules when allocating a portion of your pension to another individual. In accordance with Federal Law, a divorce decree is not enough to authorize the division of a pension account. A QDRO is a required step in the divorce process to allocate the portion of the retirement account to the non-employee spouse. The attorneys will work together to negotiate how to divide your pension and review the tax implications of this decision, if any, before settlement. They will ensure that the preparation and implementation of a QDRO and the split of the account are aligned with Federal laws.
Dividing a pension during a divorce can be a complex and emotionally challenging process, particularly because retirement accounts are often among the most valuable marital assets accumulated during a marriage. Understanding how New Jersey’s equitable distribution laws apply to pensions, as well as the role of Qualified Domestic Relations Orders, is essential to protecting your financial future. By maintaining accurate records, understanding your rights, and working with experienced legal professionals, parties can help ensure that retirement assets are divided fairly and in compliance with both state and federal law.
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Wilson Family Law LLC
667 Shunpike Road, Suite 5
Chatham, NJ 07928
Office: 973-520-4275 Fax: 973-378-0603
email: cindy@wilsonfamilylawllc.com
Website: wilsonfamillylawllc.com