There is a misconception among divorcing spouses that property division is little more than a two-step process. You discuss who gets what, sign the agreement and that's that. However, there are so many more steps and considerations to take during this process than people realize.
For instance, if you or your spouse has been funding a retirement plan during your marriage, more has to happen for spouse to receive his or her portion of the benefits than just including it in a settlement agreement. In order for a portion of someone's pension to be paid to someone else, a qualified domestic relation order must be prepared.
A QDRO is a legal document that tells retirement plan administrators how to divide the funds in the account and distribute them to an alternate payee. It will instruct the administrator on who is to receive benefits, when they should receive these benefits, and how much of the benefits should be paid.
Oftentimes, it is considered wise to secure the QDRO as soon as possible when filing for divorce. This allows parties to negotiate and clarify the terms. And while there is no hard-and-fast timeline for completing a QDRO, putting it off could prove to be a costly mistake.
Pensions can be substantial assets that are often categorized as marital property. In New York, marital property is eligible to be distributed fairly between spouses. You might think of it as something similar to a joint bank account; you wouldn't want to lose or give away your fair share of that money.
In order to secure a fair and comprehensive divorce settlement that addresses pensions properly, it can be critical that you discuss your situation with an attorney. These are aspects of a divorce settlement that people forget about or give up when they don't understand their rights. Speaking with an attorney can help you get a complete picture of what you rightfully deserve in your settlement.