Experts in Dividing Retirement Assets in Divorce.
QDRO FAQs
- What is a QDRO?
Under federal law, a Qualified Domestic Relations Order “QDRO” is a specialized court Order which creates or recognizes the existence of spouse’s the right to receive all or a portion of the benefits payable to a participant in a pension plan or retirement account such as a 401(k). - Why do I need a QDRO when my separation agreement says that I am entitled to my share of the retirement benefits?
The pension or 401(k) plan was not a party to your divorce action; accordingly, the terms of your settlement agreement are not sufficient to legally require them to divide your ex-spouse’s accounts or pension. A QDRO orders the Plan Administrator to pay the benefit or divide the account in accordance with the terms of your divorce agreement or decision after trial. - Why is it important to have a QDRO prepared as soon as possible after the divorce judgment?
Once you are no longer married, federal spousal protections will no longer apply. If, for example, your spouse re-marries and then dies, his or her new spouse could obtain death benefits to which you might have been entitled in the divorce. Money in a 401(k) or IRA account could be withdrawn or transferred to a new, hidden account, dissipated by poor investment decisions, or left to another beneficiary who will be paid after the participating spouse dies if there is no QDRO in effect at that time. Plans frequently change administrators or recordkeepers and it may be difficult if not impossible to obtain the records relating back to a divorce which occurred years earlier. The remedies for these situations often involve costly litigation against and a possibility of a forfeiture of benefits. The more time that passes between the divorce and the filing of a QDRO, the more likely there are to be costly complications, difficulty in calculating your rightful share of an account, or the complete loss of a benefit due to the untimely death of the participating spouse. Do not delay getting your QDROs filed! - How can I make sure that my interests are protected?
We advise potential clients still in the divorce process to have their attorney contact our office as soon as possible after the divorce action starts. It is most important to have key terms relating to death benefits, survivor option elections and allocation of investment gains included in your settlement agreement, or these rights could be forever waived. If you are the pension holder, we can also assist your attorney in valuing your pension for purposes of settlement, tracing the gains/losses on pre-marital contributions, and reviewing QDROs prepared by your spouse’s attorney to make sure that they comply with the terms of your agreement. We also prepare custom settlement agreement language for your attorney to use in your agreement so that nothing will be inadvertently omitted. The earlier you get us involved, the better! - Why should I retain D’Agostino/Jones, LLC, one of New York State’s only boutique QDRO law firms to prepare my QDROs?
- Because every Plan is different and may contain different benefits, survivorship options, terms and procedures for administration and are constantly changing;
- Because an action for divorce has so many issues that the average matrimonial attorney simply has no time to become familiar with the highly technical concepts of ERISA and state retirement laws;
- Because if the QDRO is not done correctly or in a timely fashion, a spouse may be left with a reduced benefit, or no benefits at all, and a Participant may be forced to pay more than his or her equitable share of the pension.
Unlike many pension “consulting” firms who consist of non-attorneys or who employ non-attorneys to draft QDROS (and who cannot or should not be providing legal advice regarding these issues) we are attorneys, licensed to practice in New York State with nearly 30 years of experience. We can handle your QDRO beginning with the preparation of language for your settlement agreement until the final QDRO has been approved by the Plan and benefits are paid out. Non-attorney QDRO preparers cannot enter Orders in Court because they are not lawyers; they will send you back to a general practice attorney and you will undoubtedly incur additional substantial charges involved in getting the Order signed by the Court and potential errors along the way. At D’Agostino/Jones, LLC, we are uniquely positioned to handle your QDRO division from “soup to nuts;” we will remain in the case until your Order has been fully approved by the Plan following your divorce.
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BUSINESS VALUATIONS
A business appraiser can play a crucial role in a divorce proceeding, especially when there are business interests involved as part of the marital assets. Roles for the business appraiser include:
- Determining Fair Market Value: The primary role of a business appraiser is to assess the fair market value of any business interests owned by one or both spouses. This valuation is important for equitable distribution of assets in the divorce settlement.
- Division of Assets: Once the business’s value is determined, it can be considered an asset in the marital estate subject to division between the spouses. The business appraiser’s valuation provides a basis for determining the fair and equitable distribution of the business interests.
- Court Proceedings: In some cases, the business appraiser may be called upon to provide expert testimony in court to explain the methods used in the valuation and defend the accuracy of their assessment. This can be particularly important if there is disagreement between the parties or their legal representatives.
- Spousal and Child Support: The business appraiser may also assist in assessing the income generated by the business, which can be relevant for determining spousal support or child support payments.
- Uncovering Assets: A skilled business appraiser may help uncover any attempts to hide or undervalue business assets. This is important for ensuring that both parties have a full and accurate picture of the financial situation.
- Settlement Discussions: The valuation provided by the business appraiser can serve as a basis for negotiations between the divorcing parties. It helps them reach a mutually agreeable settlement without the need for a protracted court battle.
It’s important for parties involved in a divorce to engage qualified professionals, including business appraisers, to ensure a fair and accurate assessment of assets. Legal advice should be sought to understand the specific laws and regulations governing divorce and asset division.
POST-DIVORCE ESTATE PLANNING
At D’Agostino/Jones LLC, we understand that the end of a marriage is not just a legal process, but a significant life transition requiring careful consideration of your financial future. You will need to revisit your Will, Healthcare Proxy, and Power of Attorney elections. It may be advisable, especially where a second marriage. Our experienced attorneys can assist with your post-divorce legal issues including:
- Comprehensive Financial Analysis: Our attorneys will conduct a review of your overall financial situation after your divorce, taking into account your assets, liabilities, income and expenses. We will craft an estate plan tailored to your unique goals following your divorce.
- Second Marriage Planning: If you are contemplating a second marriage, we can prepare trusts and estate documents which will prevent you from inadvertently disinheriting the children of your first marriage, while still preserving assets for your second spouse to enjoy should you die before them.
- Domestic Partnership Arrangements: Should you enter into a relationship without marriage, we can craft estate documents to provide for your partner while also providing for children and others, taking into consideration the tax ramifications which may arise.
- Asset Protection Strategies: We can create a prenuptial agreement which will prevent disputes over money and property should you decide to get married again. This will help to ensure that you do not incur the stress and expenses of your first divorce in the event that your relationship ends. We can also create specialized trusts to allow you to preserve your assets for the next generation in the event you become incapacitated and need full time care. Finally, we can create customized trusts to ensure that protect your hard-earned estate assets from being lost if one of your children faces bankruptcy or divorce. We can create trusts that are specifically crafted so that your estate does not pass outside of your bloodline to outside parties.
- Incapacity Planning: We will create the documents necessary for a person you designate to make financial and critical health care decisions for you if you are either permanently or temporarily unable to make these decisions for yourself.
Why Choose D’Agostino/Jones LLC for Post-Divorce Estate Planning?
- Holistic Approach: We understand that life does not end with divorce. Our comprehensive approach addresses both the legal and financial aspects of your particular situation to meet your goals and ensure that you and your children are provided for in the event you become incapacitated or die.
- Expertise and Experience: Carolyn D’Agostino was one of the first attorneys in the Capitol District to obtain an advanced law degree (LLM) in estate planning and elder law and has years of experience drafting estate plans for our post-divorce clients. Bob Jones has decades of experience in business planning, accounting, and financial analysis, along with family and matrimonial law. Together we make a powerful team to protect your post-divorce assets and assist you in your planning goals.
