When divorcing in New Jersey, individuals often find that negotiating assets is one of the more difficult parts of the process. This can be especially true with high-asset individuals who don’t have a prenuptial agreement in place. Dividing assets can mean deciding who gets the family home, splitting investment accounts, and negotiating the division of retirement plans. A QDRO, or qualified domestic relations order, is used in some divorces to determine who gets assets related to retirement plans.
How a QDRO works
A QDRO is an official decree that provides for the payment of retirement funds to the retiree’s ex-spouse. The portion of the retirement fund paid will be negotiated at the time the order is decreed. This type of document is beneficial for anyone with a significant amount of funds in their retirement plan, but those with more modest funds can also benefit from having a QDRO.
The QDRO isn’t necessary, but it can make the property division process go more smoothly and can also save time. When one has a QDRO, the funds aren’t taxed or penalized for early withdrawal as long as the funds are transferred into another retirement account. A QDRO does have limitations so it’s important that both parties understand the specifics of the agreement.
Negotiating assets during divorce
It’s essential for divorcing individuals to understand their rights. High-asset divorces can be particularly stressful because of the negotiation process. Emotions are often high during this time, which can make it difficult to make decisions without guidance from someone who understands New Jersey divorce laws. Individuals who are considering divorce can work with an attorney to better prepare themselves for all divorce matters.