Posts Tagged division of assets

Dividing Qualified Retirement Plans in the Aftermath of Divorce

Splitting assets during a divorce can be an arduous task. To complicate things, the division of certain retirement savings accounts requires an extra step.

DRO vs. QDRO Divorce proceedings often conclude with a domestic relations order (DRO) to lay out the division of retirement assets. However, assets from a qualified retirement plan, such as a 401(k), are covered by the Employee Retirement Income Security Act of 1974 (ERISA). These types of retirement plans have stricter rules when it comes to benefit distribution and therefore require an approved DRO is known as a Qualified Domestic Relations Order (QDRO).

Federal law stipulates that a QDRO is required for qualified plans like defined benefit plans, ESOPs, 401(k) plans, and profit-sharing plans. According to ERISA and Internal Revenue Code, most qualified retirement plans won’t pay any benefits to an ex-spouse without a QDRO because plan participants can’t legally assign their stake in the plan … Read More »



Is Massachusetts a 50/50 state when it comes to the division of assets in a divorce?

The Commonwealth of Massachusetts is not a 50/50 state. When a court is needed to rule on the allocation of assets, they are not necessarily divided equally between the two parties. While some states mandate a 50/50 split, Massachusetts is an equitable division state.

Commonwealth laws dictate that the courts can decide on a fair division of assets regardless of who actually owned it. A court could declare that the division is 60/40, or 70/30, etc. Any assets are subject to division between the spouses, and not always equally. This includes inheritance, a spouse owned business, real estate, retirement accounts, etc.

Many factors are taken into account when determining the division of assets. The factors considered are tailored to the individuals involved. Some examples include the length of the marriage, the behavior of each party during the marriage, the health status of both parties, and the occupations of each … Read More »