Divorce can be a challenging time, and one of the biggest concerns of those going through a divorce is how to divide their assets. Retirement or pension benefits can be a significant source of income and must be divided fairly in a divorce according to the laws in New Hampshire. Here is what you need to know about dividing retirement or pension benefits in a New Hampshire divorce.
Understanding Marital Property in New Hampshire
New Hampshire is an equitable distribution state, which means that marital property is divided in a way that is fair and just based on the circumstances of the case. Marital property includes any assets that are acquired during the marriage, regardless of how they are titled. Retirement accounts and pensions earned during the marriage are usually considered marital property.
Division of Retirement or Pension Benefits in New Hampshire
Retirement or pension benefits earned during the marriage can be divided between the spouses in a divorce. The court will typically order a Qualified Domestic Relations Order (QDRO), which is a court order that directs the plan administrator to divide the retirement or pension benefits between the spouses. The QDRO outlines the terms of the division, including the percentage of the plan that will be awarded to each spouse.
Defined Contribution Plans
Defined contribution plans, such as 401(k) plans or IRAs, are divided differently than defined benefit plans. In a defined contribution plan, the value of the account at the time of the divorce is typically divided between the spouses. The QDRO will stipulate how the funds will be transferred, such as rolling over the funds into a separate account for the other spouse.
Defined Benefit Plans
Defined benefit plans, such as pensions, are divided differently due to the nature of these plans. The QDRO outlines how to calculate the pension benefit that will be awarded to the non-employee spouse based on factors such as the length of the marriage and the portion of the pension earned during the marriage. The non-employee spouse would be awarded a percentage of the pension benefits that are paid out in the future when the employee spouse retires.
Factors Considered in Division of Retirement or Pension Benefits
When deciding how to divide retirement or pension benefits, the court will consider several factors, such as the length of the marriage, the contributions of each spouse to the retirement account, and the financial needs of each spouse. The goal is to divide the retirement or pension benefits in a way that is fair to both parties based on their unique circumstances.
Conclusion
Retirement or pension benefits can be significant assets in a divorce, and it is crucial to understand how they are divided. A Qualified Domestic Relations Order will be necessary to divide these benefits, and the court will consider several factors when making a decision. Speaking to an experienced divorce attorney can help ensure that your rights are protected and that you receive a fair share of the retirement or pension benefits earned during the marriage.