Elimination of Retirement Plans

Colorado Divorce Lawyer: Retirement Plans Considerations

In today's hard economic times, many people are scrambling to stay afloat financially, under constant threat of losing a job. Company elimination of retirement plans and pensions designed to cover their future needs only creates further financial stress. When divorce and complex issues involving equitable division of martial property—including retirement plans—are factored in, people quickly become overwhelmed.

Knowing the assets, relationships and potential impact retirement benefits and other forms of marital property can have in a divorce is where the Law Office of Eric Ruderman can help ensure your interests stay protected today and tomorrow. Contact us to find out how.

Dividing Retirement Plans in a Divorce

Retirement funds are highly complex assets involving ERISA compliance, tax and other legal considerations few individuals understand. Proper valuation and negotiating equitable distribution of marital property in a Colorado divorce is also difficult. Retirement plan benefits that could be eliminated make a divorce's outcome, especially in high-asset divorces, dependent a couple's individual situation.

• What happens if marital property is equitably distributed but the plan's value ends up being less than expected?
• What happens if a retirement plan is eliminated after a divorce decree is finalized?
• What happens if a spouse has contributed a substantial amount but isn't vested yet and the plan is eliminated?
• What happens when one spouse takes the house and the other takes a retirement plan that goes later is discontinued?

We are available to assist you with understanding marital property division involving:

401(k) - A common retirement plan offered by many private employers, Colorado courts can divide them among spouses during a divorce regardless of who is the employee. Dividing 401Ks requires a separate Qualified Domestic Relations Order (QDRO), and proper completion is critical in order to comply with plan requirements and specific divorce decree provisions. When a company chooses to eliminate 401Ks the distribution of any proceeds to be potentially divided in a divorce will depend on investment strategies used, vesting status, tax-compliance issues and other complex matters.

Defined Benefit Plans (Pension Plans) - Often limited to public sector employees and some big corporations, employers offering these retirement plans pledge to pay a specified amount at retirement based on age, years of service, salary and other factors. Also subject to division among spouses in a divorce, pensions involve complex valuation issues, potential pre- and post-marriage exclusions and the fact that receipt of benefits by either spouse only takes place at retirement.

If a company decides to eliminate a pension plan, distribution of any monies depends on a wide range of complex legal and financial compliance matters involving federal ERISA laws and tax concerns. In today's tough economy, there is always a risk the company pledging pensions to employees may dissolve and all funds could vanish along with them. Whether a spouse has retired already, has years to go before retirement, dividing uncertain pension benefits in a divorce, requires legal guidance from an experienced attorney.

Protecting Your Marital Property Rights and Interests in Divorce

Colorado laws concerning retirement plans and similar assets in a divorce are complex. Our attorneys can help you understand and resolve potential problems with pension and 401(k) retirement plans, traditional or Roth IRAs, stock options and other investments.

To schedule an appointment with the family law advocates at the Law Office of Eric Ruderman today, contact our Denver, Colorado office or call us at 303-861-1444.