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Will you lose your retirement in your New Jersey divorce?

On Behalf of | Jun 22, 2023 | Divorce

New Jersey comes in just under the national average for divorces according to the CDC. In divorce, the stakes can be high, particularly when it comes to retirement accounts. These accounts represent a substantial asset that couples often overlook when considering divorce proceedings.

Retirement accounts can be tricky to deal with, especially since New Jersey operates under equitable distribution principles.

Equitable distribution and retirement accounts

In New Jersey, marital property gets divided based on equitable distribution. This principle means that each spouse receives a fair, but not necessarily equal, share of the marital property. Retirement accounts contributed to during the marriage, including pensions, 401(k)s, IRAs or other types, typically count as marital property.

When dividing marital property, the judge will consider numerous factors including the length of the marriage, the age and health of the parties, the standard of living established in the marriage, the earning capacities of each spouse and more.

Protection of retirement accounts

While retirement accounts typically count as marital property, there are strategies to protect them in a divorce. A prenuptial or postnuptial agreement can explicitly exclude these assets from division in the event of a divorce. If there is no such agreement, the process becomes more complex.

Division of retirement accounts

Depending on the type of retirement account, the court will issue a Qualified Domestic Relations Order to dictate how to divide the account. This legal document specifies the percentage each spouse will receive from the account, thus protecting the interests of both parties.

Knowing how New Jersey divides retirement accounts in a divorce can help you prepare for the potential financial implications.


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