For many couples, the most valuable assets they hold are wrapped up in one or more retirement accounts. When these couples divorce, they face significant legal and financial challenges to appropriately value and divide these retirement assets.
Working with an experienced attorney who understands the complex requirements associated with qualified retirement plans and similar assets can ensure that property division is fair and complies with federal and state standards in Nevada.
Retirement Plans Under Nevada Community Property Laws
Regardless of the type of plan and whether it is part of an employer-sponsored plan or individually managed, virtually all retirement assets are subject to the community property laws of Nevada. All contributions and increase in value during the marriage—and possibly pre-marital contributions as well—can be divided between spouses on a 50/50 basis unless a couple has executed a valid pre- or postnuptial agreement specifying that retirement accounts will not be divided in the case of divorce.
This task is not as straightforward with retirement assets as dividing other property such as a home or funds in the checking account. The primary difficulties are determining the proper value for the assets and obtaining the necessary Domestic Relations Orders to complete the transactions necessary for the division.
Valuing Retirement Plan Assets
One of the most critical factors in dividing any type of retirement assets is the valuation date. Do you consider the value at the time the divorce papers are initially filed? At the time the divorce is finalized? Or, for plans like traditional pensions and annuities, is the value calculated based on when benefits are expected to be paid out?
Traditional pension plans and annuities usually require a professional appraisal to get an accurate determination of the value for divorce. Both partners in a divorce need to feel confident that they are working with professionals who understand how to value these critical assets properly in order to protect their interests.
The Need for a QDRO
A Domestic Relations Order is a court order that instructs a retirement plan to pay benefits to someone other than the retirement plan participant. Qualified retirement plans are subject to additional legal requirements, so courts must issue a Qualified Domestic Relations Order, referred to as a QDRO. Many divorce cases require professional drafting of one or more QDROs to meet different federal requirements which adds to the complexity and expense of a divorce. If your divorce lawyer will be using an outside professional to draft QDROs for your divorce, it is wise to be sure that the instructions are written up to combine transactions when possible to use as few QDROs as feasible.
Work with Divorce Lawyers Who Understand Complex Retirement Assets
With so much at stake, it makes sense to take all available steps to protect your interests in valuable retirement assets in a Nevada divorce. At Naimi Family Law Group, we know how to appropriately value assets and will strive to ensure that you receive the full share to which you are entitled. Contact us today for a confidential consultation to learn how we could protect your interests in divorce.