Mediation for Couples 50+

Recent studies show that 1 in 4 divorces involve people 50 and over. Moreover, a divorce in your 50’s has very different considerations than a divorce in your 20’s, 30’s, or even 40’s. For example, while child custody, visitation, and child support are often non-factors (children may already be grown and past the age of financial support), other aspects such as alimony and especially equitable distribution can play a much more important and influential role because couples in their 50’s tend to have amassed more wealth. In today’s article, the attorneys of Townsend, Tomaio & Newmark will discuss “gray divorce”, why alimony and equitable distribution are often more complex in these types of divorces, and what can be done to ensure a fair, reasonable, and protected resolution to these issues.

Equitable Distribution and Retirement Plans

Division of retirement plans such as 401k’s is, in and of itself, is a complex and unique divorce issue. When it comes to 401k plans, courts take various factors into account when deciding if and how the plan should be divided.

Firstly, courts factor the duration of the marriage. Specifically, what was put into the retirement account during the marriage and by whom? Usually money put into a 401k before marriage is not subject to equitable distribution. Monies deposited into the 401k (either by an employer or by your spouse directly) during your marriage are factored for division.  In New Jersey, divorcing spouses are legally entitled to up to fifty percent of what was put into the 401k during the marriage, meaning from the date of marriage until the date of the filing of the complaint for divorce.

Once this amount is finalized, the court will sign your judgment of divorce containing this information. It will then be the responsibility of your attorney to draft a Qualified Domestic Relations Order (QDRO) that tells the administrator of your 401k how it should be divided in order to comply with the Employee Retirement Income Security Act. A family court judge must then approve and sign the QDRO and the plan administrator must then also approve it. The QDRO will establish your spouse as an “alternate payee,” for your 401k.

Almost every type of retirement fund will penalize for early withdrawal, however certain types of retirement funds qualify for a Qualified Domestic Relations Order, which allows for penalty free withdrawal. It is important to work with an experienced equitable distribution attorney in order to ascertain which retirement plans qualify, how to secure a QDRO, and the best ways to equitably divide retirement assets.

Open Duration Alimony

Another important consideration in a “gray divorce” is that of open duration alimony. In NJ, alimony can only be awarded for as many years following a divorce as the marriage itself lasted, unless the marriage lasted for 20 or more years. While not every gray divorce will involve a marriage of 20 or more years, many will.

If a marriage lasted for more than 20 years, financially dependent spouses can petition the court for open duration alimony. Open duration alimony will last until either party passes away or the dependent party remarries. However, if for any reason circumstances change substantially for either party after the open duration alimony agreement is reached, the agreement can be modified. Either an increase in alimony obligations or a decrease can be ordered by the court, depending upon the circumstances. For this reason and others it is crucial to have an experienced and skilled attorney as your advocate.

Disclaimer: This website and information presented are for the purposes of legal marketing and general education. No part of this site should be construed as legal advice. Please consult with an attorney regarding your specific situation. © 2019 Townsend, Tomaio & Newmark, L.L.C.