Defined Contribution Plans Attorneys in Rhode Island
These types of retirement plans are more commonly known as 401(k) or 403(b) plans. These plans, if earned during marriage, are considered a marital asset subject to division during a divorce. These plans contain a certain amount of pre-tax dollars, and the parties can determine what amount, as of a certain date, that the parties are entitled to.
QDRO Case Result
Hired by the Wife to draft the Qualified Domestic Relations Order so she could receive her portion of the Husband’s annuity. We discovered upon reviewing the pension documents that there were in fact two pension plans. The court Orders referred to only one plan, so the Wife was missing out on her portion of a substantial, if not the largest, marital asset. We prepared the Qualified Domestic Relations Order for the designated plan and notified the attorneys for the parties that they had an unresolved issue.
You should be aware however, that there could be significant tax consequences to removing funds from a “pre-tax” or retirement account. If you and your spouse will be dividing this type of asset, you should contact our office about how to avoid tax consequences.
Federal law allows for a transfer of these funds pursuant to a divorce without penalties or tax implications if it is done in a certain way. A separate court order, known as a Qualified Domestic Relations Order (QDRO), is required. Our office drafts QDROs for parties or attorneys in order to divide this type of asset. This document is required for the company to be able to give someone else a portion of another person’s retirement account. It can only be done for the benefit of a spouse, former spouse or minor child. The date of division, whether there are gains and losses on that amount, how to handle any loans, the name and components of the plan, are just a few of the many issues that must be addressed in the QDRO. Some of these provisions are typically ignored by practitioners and lead to further litigation down the road or the Plan rejecting (and ignoring) the Order.
Rhode Island Defined Contribution Plans Attorneys
We caution divorced spouses that QDROs are not typically included in your attorney’s original fees and not all attorneys will draft these types of orders. Most will tell you that someone else will need to be hired to do it at the conclusion of your divorce, but you may not have realized they did so at a time when you are focused on other things. If you have never seen a copy of the QDRO, or you never received correspondence from the Plan in your own name, a QDRO was probably never completed. Without a QDRO, you won’t get your portion of the Plan. The Court decree is not enough!
If you think your attorney is not familiar enough with defined contribution plans to divide the asset properly; you think you should have had one done but are not sure it actually happened; or you’re an attorney who wants more information about what we charge and what we can provide to you with your case, please call us.