If you are getting divorce in New Jersey, then you need to understand that all your marital assets can be eligible for distribution. This doesn't just include your furniture, car and home; it also includes retirement contributions you made while you were married.
In other words, if you and/or your ex has a 401(k), then these benefits could be divided between you in your divorce. However, before you take on the massive penalties of simply withdrawing the money and splitting it up, you should discuss a Qualified Domestic Relations Order, or QDRO, with your attorney.
What is a QDRO?
A QDRO is a court-approved document that recognizes or creates an alternate payee for a retirement plan. In the event of a divorce, the alternate payee would be your ex. As an alternate payee, your ex can then receive all or some of the benefits under the plan.
When and how do we get a QDRO?
Once you or the courts have determined that a specific 401(k) is eligible for distribution, then you or your ex will want to have a QDRO created. Oftentimes, one of your attorneys will be able to do this, but no matter who you decide on, it is crucial that you confirm who will be responsible for preparing the document.
What types of issues can arise with a QDRO?
Simply having a QDRO is not necessarily enough to protect the fair and accurate division of an asset like a 401(k). You must also be sure that the order is accurate and specific, as well as submitted in a timely manner, otherwise you could face serious consequences for mishandled, inaccurate or missing documentation.
In order to examine QDROs in more detail, as well as other options you may have for dividing retirement accounts in your divorce, you would be wise to discuss your case with an experienced family law attorney.