Q. I’m planning some big changes this year. I plan to get divorced — we’ve been married for five years — and I also plan to retire. I have my current 401(k) plan from a job I got three years ago, which I know I will have to share with my spouse. But I also have two old plans that I had from before we got married. Do I have to split the old 401(k) plans or can I keep them all for myself?
A. We’re happy to offer some suggestions, but it’s essential that you meet with an experienced family law attorney who knows more about your situation.
That said, as part of your divorce, you will need to address equitable distribution. That’s the accounting for and distribution of all assets and liabilities that exist as of the date your Complaint for Divorce is filed, said Kenneth White, a family law attorney with Shane and White in Edison.
“Certain assets are immune from equitable distribution, such as any inheritances or gifts you had received from third parties in your independent name during the course of your marriage, as well as property/assets that you owned before the date of marriage, i.e. pre-marital property,” he said.
The retirement benefits you amassed prior to the date of your marriage are also considered pre-marital property, and you’d keep 100 percent of that, White said.
He said the only exception to you retaining 100 percent of your pre-marital property in the event of divorce is if you had “comingled” such assets.
“Commingling occurs if you take a pre-marital asset and transfer it into joint names or into a new asset in joint names,” he said.
For example, the funds would now be co-mingled if you had $100,000 in pre-marital funds, and during the marriage, you took those funds and bought a home in joint names.
If you are serious about your intention to divorce, White said you should secure a consultation with an experienced family law attorney in the immediate future because there may be additional consequences to the actions you plan to take that you have not considered.
For example, you may have exposure to an alimony obligation, and if you retire before your full retirement age as recognized by Social Security, you may be creating a financial hardship that you are not otherwise prepared to address, he said.
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