Long Island Divorce Attorneys Protect Your 401(k)
Aggressive representation secures your retirement assets
Few assets have a greater impact on your financial security than your retirement savings. Divorce can throw a wrench in the works, so that all your best-laid plans grind to a halt. If you’re anxious about what New York’s Domestic Relations Law will do to your pension plans or 401(k), Bryan L. Salamone & Associates, P.C. can put your mind at ease. Our aggressive attorneys fight for your financial rights, helping to ensure the court grants you a fair share of retirement savings and that any documentation is precisely drafted to deliver the intended result.
The case for sharing retirement benefits under New York’s Domestic Relations Law
It is settled law that the dependent spouse of a provider with a retirement plan is entitled to a fair share of the plan’s proceeds. Among the factors the court must consider during equitable distribution are three points germane to retirement asset division:
- The loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution
- Any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party
- The tax consequences to each party
Because a divorce changes the dependent spouse’s rights to share in retirement savings, the court must act to preserve that claim. How much of a share the dependent spouse gets depends on tangible and intangible contributions made to the acquisition of the retirement assets. In a traditional marriage, there were often the tasks of a wife and mother: maintaining the home, raising the children, providing emotional comfort and even earning wages to support the husband while he earned a degree or professional license. In our contemporary society, these services are the same, although they are no longer gender specific, and they operate to give the dependent spouse a claim to a fair share of retirement assets. For couples who married after the 401(k) or other retirement fund was created, the dependent spouse cannot claim an interest in the fund’s assets before the marriage.
Finally, there are the tax consequences of dividing a retirement fund. Obviously, cashing out would expose the assets to disastrous tax liability, so the law allows the fund to remain intact, while allocating assets for future distribution under a qualified domestic relations order (QDRO) or, in the case of government employees, a domestic relations order (DRO).
Avoiding the pitfalls of qualified domestic relations orders (QDROs)
Once the court has determined that a dependent spouse has an equitable claim on retirement assets, the attorneys for each side must negotiate a QDRO or DRO. Here is where your attorney’s experience is very important, because a mistake or omission in drafting the agreement can have terrible consequences. We use the discovery process to review all pension information. We negotiate aggressively to ensure the inclusion of terms that protect your rights against various contingencies. Issues we address include:
- Disability retirement
- Depletion of pension due to loan defaults
- Pre- and post-retirement survivorship benefits
Of course, a QDRO is not always necessary or in the best interest of every client. We analyze the present value calculation to determine whether a QDRO is preferable to an off-set payment from other marital assets, and advise you on the best course of action for your particular circumstances.
Contact Long Island’s largest divorce law firm to protect your retirement plan
Your financial security is riding on your pension or 401(k). With an experienced attorney from Bryan L. Salamone & Associates, P.C. managing the equitable distribution of your property, you can rest assured. Call us immediately at 1.631.479.3839 or contact us online to schedule a free initial consultation.