In New York State, all marital property is subject to the state’s Equitable Distribution Law. This includes retirement accounts. Traditional/Roth IRAs, pensions, 401(k)s, 403(b)s, and 457(b)s are the types that most often come to mind. Once an agreement has been reached on how these assets will be divided, the final step in the process is actually dividing them. Most traditional and Roth IRAs can easily be divided, without penalty, with the plan participant’s consent and the filling out of a couple forms.
Dividing plans that are offered by an employer, i.e., pensions, 401(k)s, 403(b)s, and 457(b)s is a little more complicated. To accomplish this, and avoid taxes on the distribution or early withdrawal penalties, a Qualified Domestic Relations Order (QDRO) must be drafted, typically by an attorney, and submitted to the court. A QDRO is a court order, once signed by a judge, that directs the division of the retirement asset in question. Once the QDRO has been approved by the plan administrator, any attorneys involved, and the judge, the plan administrator will begin the process of splitting the retirement account per the QDRO’s instructions.
For individuals participating in the New York State and Local Retirement System (NYSLRS), the state website offers a wealth of information for any member or spouse going through a divorce.
In the end, almost every divorce is a negotiated settlement and retirement assets are just one piece of the puzzle. Whether your situation is contested, uncontested, or you choose mediation, at Bates Family Law we truly understand the multiple ways that all these pieces can fit together in a way that is focused on your future. Give us a call at today at (585) 433-4661 to schedule your consultation.
