Typically, and in Virginia especially, all marital assets are looked at regardless of whose name they are in. If the wife has an IRA of $20,000 and the husband has an IRA of $10,000, our courts will generally, and people also generally agree to, equalize them so that they each end up with $15,000, which […]
Pensions, Retirement Plans, QDROs
Can someone qualify for Social Security retirement benefits based on the earnings of his or her ex-spouse?
Yes, Social Security benefits are not divisible in divorce. They’re not a property asset, but what happens when you go to apply for Social Security at retirement age, they generally ask you to fill out an enormous form that asks you who you’ve been married to. If you have been married to someone for 10 […]
What happens if the plan participant dies after the parties are divorced but the QDRO hasn’t been drafted yet?
What happens is a lot of bad things, essentially. This is a huge problem in divorce laws. It impacts in the QDRO areas and it often impacts in life insurance because people are often ordered to rename their ex-spouse or the children as beneficiaries of life insurance after divorce and they don’t do it. They […]
Does an ex-spouse lose his/her pension benefits if the plan cannot pay according to the court order?
Let’s say the court has ordered that a QDRO should be drafted to give the ex-spouse half of the marital portion of the pension as a lump sum. After the divorce is final, the ex-spouse discovers that the plan doesn’t pay lump sums. Does this mean that the ex-spouse loses his or her benefits? If so, how do you protect your clients from this sort of issue?
What is a Qualified Domestic Relations Order (QDRO) and how and when is it used?
The Qualified Domestic Relations Order is the court order that ERISA created to allow private pensions to be divided by state court. It’s an order that’s entered by the divorce court and then sent to the plan administrator of the pension or the 401(k) plan to allow the retirement assets to be divided. The employers […]
When dividing pensions during a divorce, what are the most common errors to look out for?
The first most common error is that people don’t realize they have a pension. It used to be that lots of people had pensions in the private sector, but honestly, once IBM took away its pension plan and converted it to a 401(k), most of the big companies stopped having pension plans. The phone companies […]
How are pensions typically divided on divorce in Virginia?
A pension that’s really a pension, where it’s the amount of money paid monthly when someone retires, is divided by what’s called the Marital Curvature Fracture, which sounds really scary but it’s really simple. It’s divided by a fraction. The numerator is the time on the job during the marriage divided by the total time […]
Are there any penalties or taxes to be aware of in dividing a pension?
One of the key features of ERISA and all the statutes that govern the division of retirement assets is to protect the tax treatment of the retirement assets. Retirement assets are basically tax-deferred money. It’s money that you receive now or you put away now that you’re not taxed on and you’re not taxed on […]
What’s the difference between an Individual Retirement Account and a Qualified Pension Plan?
Individual Retirement Accounts are retirement accounts that people contribute to that are not connected with their employment at all. They’re only in one person’s name. Clients often say that they both have an IRA, but that’s not true. Individual Retirement Accounts are in one person’s name. Each party can have an IRA and marital money […]
What is the difference between a defined benefit and a defined contribution pension plan?
These retirement benefits are for private service. There is a federal law called the Employee Retirement Income Security Act (ERISA) that governs private pensions and 401(k) plans, things like that. These terms apply to the private sector. There are separate laws that govern federal government pensions and retirements and state government pensions and retirements. These […]
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