The end of your marriage will bring changes in virtually every area of your life, including your finances. You understand how important it is to make choices and pursue terms that will allow you to have long-term stability, but it can be difficult to focus on the long-term when faced with your current emotions and temporary circumstances. By keeping your future interests as the priority, you will be more likely to secure terms that are beneficial for years to come.
One of the most important aspects of securing your future interests after a divorce is knowing what will happen to your retirement assets. New Jersey is an equitable distribution state, which means each spouse has an equitable claim to all marital property. Knowing what the law says about the division of marital property and how you can secure a fair share of your long-term savings is critical.
Securing your rightful share of marital property
If you have a claim to a portion of retirement assets, it is important to know how to claim your rightful portion, and how to remove funds from accounts. This largely depends on the type of account in question and other factors. There are both state and federal regulations and tax laws that could affect what happens to these assets. It is also helpful to understand that the portion you could receive only pertains to the savings accumulated during the course of your marriage.
It is relatively simple to divide assets in an IRA. The order for a transfer of funds can be part of your divorce decree, and you can simply move those funds into your own IRA. This will not be taxable. However, transfer or removal of funds from a 401(k) is more complex. To do this, you will need a Qualified Domestic Relations Order, which is a legal order that allows another person to receive a portion of the funds held in the account.
The complexity of retirement accounts
The division of retirement accounts is only one aspect of your divorce, yet it could be one of the most complex. You will benefit from an understanding of how to seek your rightful share of these marital assets while also avoiding unnecessary taxes and penalties. It is helpful to have guidance as you make choices that will impact you years into the future after your divorce is final.