How Will Retirement Accounts Be Divided in Your New York Divorce?
When potential clients or new clients ask our Nyack divorce lawyers about retirement accounts and equitable distribution of retirement assets, we find that many or most fear that dividing a retirement account will bring about large tax penalties. In fact, through a QDRO (qualified domestic relation order), a retirement account can be divided into two separate tax-deferred income streams.
Consider Tax Consequences
If you anticipate a New York divorce and wish to consider all aspects of asset protection — for the entire marital estate, not just your share — you are encouraged to seek out a family law attorney with ample experience handling high-net-worth divorces. You may wish to alter some aspect of your retirement fund portfolio to minimize taxes while also minimizing attorneys' fees. You will also want to take into account deferred compensation scheduled to be paid out upon retirement or termination of a job.
In general, we observe that most working-class and high-net-worth couples are interested in keeping as much money as possible "in the family," even though the marriage is dissolving. In two-income marriages, it may be most expedient for each spouse to keep his or her own retirement account intact. Any difference in overall value may be taken into account through division of other assets. After considering applicable tax impacts, you don't want to trade apples for a lemon!
Consider Collaborative Law
Many couples find that collaborative law is the most reasonable approach to dealing with financial complexities such as division of a retirement account or other employment related assets. In a collaborative law setting, spouses and their lawyers work with a common goal of maximizing value for all members of the family — as opposed to pitting one spouse against the other as legal adversary.
As advocates of our clients, we seek to advise against agreeing to a bad agreement that does not take all financial realities into account, including retirement accounts, investments andbusiness valuation.
Contact a well-respected New York family law attorney at the law offices of McCormack & Phillips in Rockland County. Other lawyers often refer potential clients to our law firm, confident in our ability to handle challenging issues related to asset division.