A divorce takes both an emotional and financial toll, as the parties sever two lives once inextricably entangled. Among other considerations, you and your spouse will have to come to an agreement on how to divide all of your assets. This agreement should include retirement accounts like a 401(k). Aside from dividing them equitably, you will also have to figure out how to minimize taxes or you will lose even more of your savings. For more information on how to protect your 401(k) in New Jersey, please continue reading, then contact one of our experienced equitable distribution divorce attorneys in Bergen County, NJ.
Can a New Jersey divorce court divide a 401(k)?
The Garden State, like many other states, follows a form of marital property law. Under marital property law, courts must divide marital property equitably, if not equally. Typically, the courts will consider any property, including contributions to your 401(k), acquired/made before your marriage as “separate property,” and thus, not subject to division in a divorce. Conversely, courts can subject any money put into a 401(k) after you become legally married to equitable distribution.
How does a New Jersey divorce court divide a 401(k)?
Generally, if one spouse has significantly more savings than the other, the court may order him or her to give some of the savings to the other spouse. However, that does not necessarily mean that the spouse with more savings has to liquidate their 401(k) and hand part of it to their ex. Instead, the court will consider the following factors when making a determination as to equitable distribution:
- The length of the marriage
- The age of each spouse
- The physical and mental health of each spouse
- The standard of living of the spouses
- The contributions that each spouse made to the marriage
- The debts of the parties
- The income and property brought into the marriage by each party
- The earning capacity of each party
How do you prepare for dividing your assets in a divorce in New Jersey?
Before you and your spouse can decide how to fairly divide your marital assets, you will need to know how much you have. To accomplish this, you and your spouse must obtain and present summary plan descriptions of your 401(k)s and other retirement accounts. Next, you must reach out to your plan administrator to learn about any rules your 401(k) has for dividing your assets. Then, you must share this information with your skilled Bergen County, NJ property division attorneys who will use it to draft an agreement that the plan administrator will accept or reject.
To give yourself the best chance at a favorable outcome, speak with a member of our firm today.
Contact our experienced Bergen County firm
To speak with our team of family law lawyers today, please contact us online, or through our Hackensack, NJ office at (201) 397-1750.
