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 to someone else. Therefore, the QDRO is used to distribute benefits to an alternative payee.

When a QDRO isn’t Needed
Non-qualified plans, such as Individual retirement accounts (IRAs) are not covered by ERISA. This exempts them from the requirement of a QDRO to divide assets. Additionally, during divorce settlement negotiations, one spouse may propose trading another asset in place of a share in a retirement account which would eliminate the need for a QDRO.

Division of Assets
The division of assets under a QDRO must abide by state law and consider child support, alimony, or other marital property rights.

While a QDRO may require a participant to pay out a portion of funds, the court will generally divide only the marital amount of these benefits. This means contributions made and associated growth from the date of marital separation may not qualify as divisible funds.

QDRO Benefits
The participant is the retirement plan owner, and while it may seem like a QDRO primarily benefits the alternate payee, the participant can benefit as well.

Federal law imposes a 10% penalty on withdrawals taken by individuals prior to age 59.5. However, withdrawals made according to a QDRO are not subject to early withdrawal penalties.

Benefits distributed from a retirement plan under a QDRO are treated as income and are therefore taxable to the participant. When funds are sent to an ex-spouse, the funds become part of their income meaning the ex-spouse and not the participant will be responsible for the tax.

If you are entitled to an assets of an ex-spouse’s qualified retirement plan according to a divorce decree, a QDRO is required for the retirement plan administrator to divide the plan assets.

If you have questions about your pending or finalized divorce assets, contact our office. We can help you determine if a QDRO is needed as well as help draft your QDRO form.

Can my 14-year-old decide to live with my ex?

As a divorcing parent battling over custody, there is always the fear that your child will decide they would rather live with the other parent. Even once custody has been determined, parents worry as children get older, they will want to move in with the other parent.

Rest assured that minor children can’t make legal decisions, such as where they want to live. It is a common misconception that once a child reaches a certain age, they can decide which parent to live with. In truth, those responsible for determining custody are the parents or a judge if the parents can’t agree. Any child under the age of 18 does not have the final say in where they will live.

While a judge may consider an older child’s wishes, a child’s opinion is only one factor. Ultimately a judge will be guided by what is in the best interest of the children involved. Some factors considered may include:

  • each parent’s preference
  • each parent’s ability to provide the child with food, clothing, and a safe home
  • the health and mental wellness of each parent and the child
  • adverse effects a child’s present or past living conditions may have had on the child’s physical, mental, moral, or emotional health

When determining custody, neither parent begins with any greater right to custody than the other. The final decision is guided by the children’s welfare and happiness. Minor children cannot override an agreement made between parents or by a judge.

Get a Grip on Legal Jargon: Divorce Terms Explained

When facing divorce, you may find yourself overwhelmed with the legal jargon used throughout the process. Add this frustration to the mounting stress and heightened emotion, and you may be left making poor decisions. While our firm is here to help guide you through the process and answer any questions you have, this guide can help clarify some of the legal jargon you may encounter.

Types of Divorce

Irretrievable Breakdown of the Marriage
This cause for divorce stipulates that neither party is at fault and that both spouses agree that their marriage is broken.

No-Fault Divorce vs. Fault
In Massachusetts, a spouse can seek a “no-fault” divorce or a “fault” divorce.

A no-fault divorce is filed when there is an irretrievable breakdown of the marriage. This type of divorce is generally a more straightforward process.

A fault divorce, on the other hand, can be filed when one party feels the other is to blame for the breakdown of the marriage. Massachusetts law recognizes several reasons for an at-fault divorce, such as adultery, desertion, and cruel and abusive treatment, to name a few.

Common Forms Used in Divorce Proceedings

Complaint for Divorce
The first form filed to begin a civil case through the court is called a complaint. This form indicates the reason for starting a claim, and the person filing is referred to as the plaintiff.

Answer
Following the filing of a complaint, the other spouse becomes the defendant. The defendant-spouse can file a response to the divorce complaint, which is called an answer. This document is used to tell the court the defendant-spouses wishes such as alimony or child support.

Separation Agreement
The written document stating what will happen following the divorce is called a separation agreement. This document will cover property division, health and life insurance, child custody and child support, and alimony judgments.

Discovery
Discovery refers to the process of gathering and disclosing evidence for a case. Depositions and the request for documentation are standard tools used to collect evidence for a case. The Massachusetts Rules of Civil Procedure govern the discovery process.

Temporary Order
A spouse may need the court to provide decisions regarding important matters such as child support or custody while the case goes through the legal process. These decisions are granted temporarily until the court resolves the case.

Judgment
A judgment is the judge’s final decision in the case. The judgment is often provided as a written document regarding the divorce completion and final outcomes on matters such as child custody, alimony, etc.

While filing for divorce can be a difficult decision, understanding the process shouldn’t be. We’re here to represent your interests and walk you through the divorce process. Contact our office today to get your divorce questions answered and begin the process.

When to Modify Your Divorce Agreement

How long has it been since you terminated your marriage? Have your circumstances changed since then? While your divorce may last forever, your divorce agreement can change over time.

There are many reasons to consider modifying your divorce agreement. Some examples include:

  • a significant change in income that will impact child support or alimony payments
  • a job change requiring a move
  • needs of aging children
  • the remarriage of the party awarded the alimony

Child Support Modifications
With regard to child support, you can request to modify your original order. Regardless of changing circumstances, under the child support guidelines, you are entitled to review your child support agreement every three years. Modifications to increase or decrease payments can be requested. Factors such as education, training, health, past employment history, and employment availability will be considered by the Massachusetts courts when determining modifications. Hardships and loss of employment will also be considered.

Alimony Modifications
A change in circumstance that significantly alters the financial situation must occur before the court considers an alimony modification. Whether seeking to increase or decrease alimony payments, a number of factors can be used to justify a change. For example, a job change, such as a demotion or promotion, can prompt a request to decrease or increase payments.

Custody or Parenting Plan Modifications
Any change request involving children will focus on the best interests of the child. A valid reason is needed to change a custody agreement, for example, specific evidence showing that, while in the other parent’s care, the child(ren) are at an increased risk of harm. Circumstances that may warrant an evaluation to a custody agreement include neglectful parenting, substandard living conditions, excessive school absences, or a child’s request for a change.

Terminating Child Support
There are some circumstances where child support may need to be terminated. For example, if a child no longer lives with the parent receiving support or a child is no longer financially dependent on either parent. A family court judge will determine the final judgment regarding the termination of child support.

When it comes to divorce modifications, every family’s needs are different. To facilitate a change in your divorce agreement, the type of change being requested will determine how to file a Complaint for Modification. Another way to make a change may be to file a motion.

Motion Examples
A Motion for Reconsideration can be filed to make a change due to new evidence, an issue of fraud, or a mistake with the original motion. In this case, the party requesting the motion will appear before the judge who issued the original decision.

A Motion to Set Aside is used to request that a judge vacate an existing support or custody order. An order to vacate voids a current agreement and the issue reverts to an unresolved status.

Modifying a divorce agreement can be a complicated process. We’re here to help you navigate Massachusetts family law to obtain the right outcome for your situation. Contact us for more information about your specific case.

Massachusetts Grandparents, Know Your Rights Regarding Visitation and Custody of Your Grandchildren

When it comes to grandparents’ rights, Massachusetts laws can be tricky to navigate. However, grandparents do have financial, visitation, and custody rights under certain circumstances. To utilize such rights, legal assistance might be necessary to help you take action.

Grandparents today are frequently faced with decisions about what is best for their grandchildren under challenging situations. Whether seeking visitation or custody, grandparents can take legal recourse when it is in the best interest of the child/children.

Visitation Rights

Grandparents who are denied visitation with their grandchildren have a legal right to petition the court. However, grandparents are required to prove that such visitation is in the child/children’s best interests.

Under Massachusetts law, grandparents have the right to petition the court for visitation if the parents are divorced, living apart with a court-ordered separation, or are deceased. Additionally, if the parents never married, are living apart, and there is a court judgment acknowledging parentage, grandparents can file for visitation rights. Maternal grandparents can also request visitation if the parents were never married, and the father is not recognized as a legal parent.

Visitation may be granted if the grandparents can show it is in the child/children’s best interest, have a prior relationship with the child/children, and denying visitation may be harmful to the child/children’s health, safety, or welfare.

When petitioning the Probate and Family Court for visitation, grandparents are instructed to include a written affidavit. This statement is used to outline the grandparent-grandchild relationship and describe why contact has been changed. The affidavit is also where grandparents can convey to the court how a child’s health, safety, or welfare may be at risk if visitation is not granted.

Getting Custody

Any grandparent who feels the safety and well-being of their grandchildren is at risk has the right to petition for custody. Depending on the status of the parents, there are two different routes for filing a custody request.

Temporary guardianship or permanent custody may be requested through the Probate and Family Court when custody is necessary for a child’s safety. In the event children are orphaned due to the death of their biological parents, the Department of Children and Families steps in to arrange care. Grandparents can present their case to argue they are suitable guardians.

Financial Aid

For grandparents on strict budgets, financial programs offer relief when acting as surrogate parents for their grandchildren. Some options include:

  • food assistance through Women, Infants, and Children (WIC) for children age five and under.
  • grantee relative benefits at the Department of Transitional Assistance.
  • survivor benefits from Social Security if one or both of the parents are deceased.
  • MassHealth insurance, which also assists in childcare.

If you are struggling with visitation or custody rights as a grandparent, you need a knowledgeable family law attorney to exercise your rights and help you navigate tricky Massachusetts laws. Contact our office today to schedule a consultation.

My ex is refusing to pay court-ordered support. What can I do?

When a divorce is finalized, a divorce decree outlines essential information about the court’s decision. A divorce decree is an enforceable order by the court that both parties are legally mandated to follow.

Items outlined can include payment of child support or spousal support, a transfer of property, or specific visitation schedules. Unfortunately, too often, parties neglect or elect to ignore the outlined orders. This can greatly harm the spouse, who is dependent on support. While the penalties to the offending party for these transgressions can be severe, the spouse being affected is required to file a claim to make the court aware of the transgression. [Read more…]

Divorcing During COVID-19

When your relationship is already strained, living under quarantine conditions can quickly shed light on a troubled marriage. Whether you’ve been contemplating divorce for a while or the stress of recent events has become the straw to break the camel’s back, so to speak, our attorneys can help you understand the divorce process and your options.

During these unprecedented times, we are all taking a look at our lives and examining our relationships. Perhaps the tiny cracks in your relationship have turned into irreparable gaping holes. With a newfound outlook on how we see our futures, some couples may decide to part ways.

If you’re among those wondering if you can file for divorce during the covid crisis, the answer is yes. While we do not know when the Court will reopen to petition your divorce officially, we can get the ball rolling. [Read more…]

Protecting Assets in a Divorce

Divorce is as much a financial blow as it is an emotional one. Alimony and child support may take a large, even unreasonable amount out of your monthly paycheck. Conversely, if your income is much smaller than your soon-to-be-ex-spouse’s, or if you stayed at home to look after the family, you might find yourself in dire financial straits if you are not awarded a just settlement.

You deserve a divorce settlement that takes into account your circumstances and your contributions to the marriage— and financial, logistical, or emotional. In this article, you will find three steps to follow to protect your assets in divorce and reach the settlement that is best for you. [Read more…]

What factors do courts consider when determining child custody?

Courts primarily base their decision on what is in the child’s best interest, using the Child’s Best Interest Standard. Factors vary from state to state, but the overall goal is to make a decision that promotes the health and wellbeing of the child.

Parents are encouraged to come to an agreement on matters of child custody and visitation to submit to the court. However, if the judge finds the settlement agreement is not in the child’s best interest, it can be rejected.

Courts will generally determine the stability of each parent’s home environment and their interest and commitment to caring for the child. Other factors include the health of each parent, both physical and mental; the special needs of the child, if any; the child’s own wishes if they are old enough to say so; whether there is evidence of illicit drug use, or drug/alcohol abuse; and adjustment to the community, such as where they go to school, proximity to other caretakers, etc. [Read more…]

Altering Your Child Custody Agreement

  • My ex-spouse has asked to pick up our children, of whom we share custody, at a different time from that stated in our custody agreement. I’m fine with the change. Do we need to alter the agreement, or is a verbal agreement enough?

The is almost always going to be “get it in writing.” While you may have the most amicable divorce in the world, you never know what the future may hold. Contracts fill the gaps left when human trust fails.

If this is a one-time, or two-time situation, a verbal agreement might suffice. Of course, without putting it in writing, if you agree to a “quick change,” you may find yourself agreeing to a years-long arrangement without intending to. [Read more…]

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