Attorney for Divorces Involving Pension Division

Serving Nassau & Suffolk Counties

When a couple divorces, pensions and retirement accounts may represent some of the most valuable assets in the marital estate. These benefits may have taken decades to build and are crucial to your financial future. In New York, pensions earned during a marriage may be considered marital property to be divided equitably.

The division of these complex assets requires sophistication and expertise. Each plan is different and there can be a myriad of options and considerations to take into account when valuing and dividing these assets. At Joseph Law Group, P.C., our attorneys are skilled in resolving the complexities of pension division during divorce. We understand the significance of these assets to your future security, the many nuances that accompany these plans, and will vigorously protect your financial interests.

With a focus on providing strong legal advocacy and personalized service, we ensure that the division of pension benefits is handled accurately and fairly. All too often, people come to us years after some other law firm handled their divorce and we are faced with terms that make no sense, cannot be implemented and ultimately, create more headaches and legal fees for both parties. Get it right the first time by hiring lawyers who are experts in this area.

Identifying Pension Benefits

Dividing pension benefits in a divorce begins with identifying and understanding the types of pensions and retirement accounts involved. These can include:

Defined Benefit Plans: Traditional pension plans where the employee is promised a specified monthly payment upon retirement. The value of these plans is based on factors like age, years of service and salary history. Sometimes, there are marital and separate components to these plans, such as when one spouse began working in that pension system prior to the date they were married.
Defined Contribution Plans: Retirement assets such as 401(k)s, 403(b)s and 457 plans, where the value comes from the contributions made by the employee and employer and the gains and losses of those investments. Like with defined benefit plans, there may be marital and separate components to these plans.

Gathering all necessary documentation, such as plan statements, employment contracts, and pension plan descriptions, is essential for an accurate evaluation. Additionally, it is important to differentiate between vested and unvested benefits. Vested benefits are guaranteed, while unvested benefits may be contingent upon further employment

Valuing Pension Assets

Accurately valuing pension benefits is critical to ensuring both spouses receive an equitable share of the marital estate. Various methods are used to calculate the present value of future pension benefits, including:

Present Value Calculation: This method determines the current worth of future pension payments based on factors such as life expectancy, retirement age, and projected income. It allows for offsets in dividing assets or a lump sum division if one party prefers to receive an immediate payout.
Deferred Distribution: In some cases, the court may order that the pension be divided. This method is often used to permit both parties to benefit from the asset or when a pension is already in what is known as pay status.

Dividing Pension Benefits

Once an agreement or court order is in place, equitably dividing pensions requires compliance with specific legal procedures, often through a Qualified Domestic Relations Order (QDRO). A QDRO is a court order that directs a retirement plan administrator to distribute a portion of the retirement benefits to the former spouse. This process can be complex, and improper handling may result in significant financial consequences, such as loss of benefits or penalties.

Implementing QDROs in New York: The process begins with preparing the QDRO and submitting it to the pension plan administrator for pre-approval. Following that step, it is submitted to the court for approval. Once the court has issued the order, it is returned to the pension plan administrator, who will implement the division of benefits according to the terms outlined in the QDRO.
Consequences of Improper Division: Failure to properly draft or execute a QDRO can lead to the forfeiture of pension benefits, tax penalties, and other financial losses. Further, it can lead to additional post-judgment litigation when the documents were poorly drafted initially. That is why working with an attorney experienced in QDROs and pension divisions is essential.

Impact on Future Retirement Planning

Dividing pension benefits will have long-term implications for your retirement planning. After the divorce, it is essential to reassess your financial strategy and make any necessary adjustments to ensure your retirement goals remain achievable.

Post-Divorce Retirement Planning: Depending on how the pension benefits are divided, you may need to adjust your savings strategy or reconsider your expected retirement date. Our attorneys can work closely with your financial advisors to help clients create a plan that accounts for the division of assets.
Adjusting Financial Strategies: Divorce often requires a reevaluation of financial priorities. By revisiting your retirement goals and developing a new plan, you can better position yourself for a secure financial future.

Guiding You Through Pension Division With Wisdom, Clarity and Sound Advice

Dividing pension assets during a divorce is a highly specialized area of law, and working with an attorney experienced in these matters is critical. At Joseph Law Group, P.C., our attorneys have the skill to handle the sophisticated issues of dividing pension assets, ensuring your future financial interests are protected.