Statistically, the month of March brings with it a peak in the number of divorces that occur annually. Researchers theorize this is at least partially due to the holiday season and its accompanying stresses, ultimately culminating in formal divorce proceedings several months later. Regardless of the cause, these statistics mostly mean that this is a time many residents of New York will be facing the emotional stresses and financial issues that accompany divorce, from determining property division to understanding how the end of their marriage may affect retirement savings.
In regard to retirement savings, something called a qualified domestic relations order (QDRO) will likely be needed. However, there are other aspects to take into consideration, such as whether to roll the received portion of a spouse’s 401(k) into an individual retirement account, and thus defer paying taxes on the amount. Pensions may also be impacted by QDROs; for example, when an individual dies, the ex-spouse typically stops receiving his or her share, but with a QDRO, the ex may still be eligible for a survivor’s pension of half the benefits the individual was receiving.
To protect credit scores, it can be essential to keep making timely payments on any shared debts, such as the mortgage, until the divorce is finalized. Additionally, taking an inventory of shared marital assets can feel daunting but is an important step. Experts advise that individuals should attempt to gather financial data — such as investment statements and tax returns — from the last five years.
In regard to property division, New York is considered an equitable distribution state, meaning the courts require a division of assets that is considered fair but not necessarily equal. Divorce may not be easy, but making sure the financial aspects are taken care of can remove a lot of the stress and hassle and mean a better future for all parties. Anyone with questions regarding similar divorce issues may wish to consult an experienced family law attorney, who can offer valuable and knowledgeable legal advice for concerns ranging from property division to child support and alimony payments.
Source: ajc.com, “Victim of “Divorce Season”? Protect Your Finances”, Kevin Voigt, March 29, 2017