Retirement plans, even those with employer contributions, are subject to distribution as marital assets, but that doesn’t mean you have to cash it out – and take the tax hit that goes with accessing the money early.
Instead of cashing out, you can instead ask the court for what is known as a Qualified Domestic Relations Order (QDRO), which leaves the 401(k) intact, but with variations.
For instance, the QDRO (pronounced “quadro”) may order the account be broken up into two accounts, which will allow you to continue contributing to your plan, while your former spouse makes decisions for the portion they control, but doesn’t contribute.
At retirement time, the QDRO allows your former spouse to collect payments as normal.
There are many ways to protect your retirement savings from tax penalties and bad settlements.
Call the attorneys at Zelenitz, Shapiro & D’Agostino at 718-725-9601 for a free consultation with an experienced Brooklyn divorce lawyer today.