Dividing retirement assets in a divorce

Posted on April 23, 2025 by Sandy Durst

Dividing Retirement Assets in Divorce: Key Legal Insights

When couples divorce, dividing retirement assets is often one of the most significant and complicated parts of the property settlement. For family law practitioners, understanding the legal framework and potential pitfalls is essential to protecting clients’ financial interests.

Marital vs. Separate Property

Retirement accounts—such as 401(k)s, IRAs, and pensions—are typically considered marital property to the extent they were accrued during the marriage. Contributions made before marriage may be considered separate property, though proper documentation and valuation are critical.

State Law Matters

In equitable distribution states such as New Jersey, courts consider factors like each spouse’s earning capacity, contributions to the marriage, and future financial needs to determine a fair division.

QDROs and Tax Implications

Employer-sponsored retirement plans (e.g., 401(k)s and defined benefit pensions) generally require a Qualified Domestic Relations Order (QDRO) to divide benefits without triggering early withdrawal penalties or tax consequences. IRAs, while not requiring a QDRO, must still be divided pursuant to a court order or settlement agreement to qualify for tax-free transfer.

Pensions and Valuation

Defined benefit pensions may require actuarial valuation to determine their present value, especially when offsetting with other assets. Attorneys should also consider survivorship benefits and whether the non-employee spouse will have access to benefits if the plan participant dies prematurely.

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Divorce and college

Posted on April 16, 2025 by Sandy Durst

If you are divorced and the have children, it is possible that issues of the costs of college and who will pay those costs will arise. Being aware of this potential responsibility and prepared for its occurrence will make the process that much easier.

College acceptance letters are being sent out now. Your child is anxious to know what their future holds and as a parent you both share their excitement and worry about the financial aspects of attending college. College is expensive.

The law offers guidance on how to deal with this issue. The Durst Firm has the knowledge and experience to take this guidance and create tangible results for our clients.

Ideally, the arrangements are made before the college selection process begins. However, that’s not always possible. Both parents and the child should be involved on the application and selection process. Costs must be a factor and expectations need to be managed. If one parent, in conjunction with the child, exclude the other parent from the process, the excluded parent could be relieved of a responsibility to contribute that they might otherwise have.

If you have questions about paying for college expenses during or after your divorce, schedule a consultation and get educated by The Durst Firm.

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Life with a Restraining Order

Posted on April 9, 2025 by Sandy Durst

If you have a restraining order entered against you, whether it be a Temporary Restraining Order (TRO) or a Final Restraining Order (FRO) it goes without saying that life gets complicated. Routine events and occasions call for diligent planning so as to avoid violating the terms of your restraining order.

This time of year is full of “family” events: proms, graduations, weddings, and first communions to name few. It is understandable that as a parent you would want to attend these events as they may involve your children or other family members and friends. However, attending can present a significant legal risk. Your attendance at a location where the other party will also be could result in a violation of your restraining order. Violations carry their own consequences which can include jail time. Don’t assume that the other party will be understanding or that your “legitimate” reason for you wanting to be there will be a defense.

At The Durst Firm, we have frequently dealt with this very situation. We have been successful in developing and implementing arrangements that allow for the defendant’s ability to attend these milestone events. If you have questions or concerns about what’s allowed under the terms of your restraining order, contact us for assistance.

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Weather impacts Court openings

Posted on February 5, 2025 by Sandy Durst

NJ Courts: Mercer County Courthouse and facilities will be closed Thurs., Feb. 6.  Court events and operations will proceed remotely. More info: njcourts.gov

As the weather progresses this evening it is possible more NJ courts will have delayed openings or switch to virtual proceedings. Communicate with your attorney to determine how to proceed.

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Divorce and taxes: 2 of life’s unpleasantries

Posted on February 2, 2025 by Sandy Durst

As if getting divorced, isn’t stressful enough, this time of year as additional factors situations that must be considered. Most notably, parties must determine how they the file their taxes. First, let me say that I am not a tax professional, and cannot give my clients tax advice, and I will not provide any tax advice in this post. I strongly advise anyone to consult with an experienced tax profession if you at any stage of the divorce process.

Generally speaking, it is advisable for parties to file a joint return when allowed as there are advantageous built into the tax code that are not available under the alternative filing designations. A joint return is permissible for any year in which you were married at the end of the calendar year. This means that if a Complaint for Divorce was filed in 2022 but your case was not finalized in 2022 you can still file a joint return. Should the divorce be finalized in 2023, you can no longer file a joint return.

It is important that you are aware of and understand the information being supplied on a joint return. Do not simply sign a return that is presented to you as you can be held liable for any violations of state and federal tax codes.

Post-divorce it is important that your tax filings comport with any provisions of your settlement agreement or judicial determination as to who can claim the children, who is responsible for taxes on the sale of the marital residence or the transfer of other assets. You may find yourself responsible for filing your own taxes for the first time in a long time after your divorce. Begin the process early and work with your tax professional to make sure they are done correctly.

Divorce is complicated. Taxes are complicated. Working with both an experienced matrimonial attorney and a skilled tax professional can be invaluable.

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