Divorce is complicated. There are many different challenges to wade through when a couple decides to end their marriage and one of the toughest is splitting up their property and assets. Property division can be a very heated and emotional process but each state, including New Jersey, has certain laws in place that can help make the process a little simpler, if not easier.
New Jersey is an equitable distribution state, which means that the marital property must be divided fairly. However, that does not necessarily mean they have to be divided equally. It will be up to the court to decide what is fair if the couple cannot agree on how to divide their property.
When a couple is dividing property the first thing that must be determined is what is marital property and what is separate. According to Forbes, separate property usually includes anything that one spouse owned before the couple was married, including an inheritance, a gift or any other property. However separate property can become marital property if a person comingles it with marital property.
Marital property is anything that is acquired by either, or both, spouses while the couple is still married. That includes all types of retirement plans including IRAs, 401ks, and pension plans. According to FoxBusiness.com, when it comes to retirement plans in a divorce, one way to make sure that retirement account funds are correctly divided and distributed is by using a qualified domestic relations order or QDRO.
This is a legal document that divides an individual’s retirement account with a former spouse, while permitting the money in a given plan to be distributed without incurring the penalties and taxes.