The divisions of assets, investments, debts, and real estate at the end of marriage is a complex area within a divorce.  It's critical that clients understand their rights and obligations during this process.
 

The Equitable Distribution Process

Typically, a discovery phase includes the identification of all marital property, as well as separate property. Marital property (and debts) are then valued, which often involves the valuation of real estate, retirement accounts, debts, stocks, savings, and even commercial entities like a business.

After identification and valuation, all marital property must be equitably divided.  This means that rather than a simple 50-50 split, the court has discretion to divide the property in a means it views as fair.  The court uses a number of factors to help guide its determinations, but its discretion is broad.

The court may consider several factors while determining equitable distribution, such as:

•    Age and health of both spouses
•    Financial situation of both spouses, including any income or active support obligations
•    Contributions to the marriage, including contributions to homemaking or to the other spouse's employability
•    Actions by one spouse to preserve wealth or waste assets
•    Alimony or spousal maintenance determinations

Retirement Asset Division

For retirement asset division, a specialized court order known as a Qualified Domestic Relations Order (QRDO) is used to divide retirement plan assets with minimal tax consequences.  QRDOs are filed after property settlement and are drafted according to its provisions.  QRDOs are then sent to the retirement plan administrator(s) for subsequent segregation of assets.

Once segregated, all funds must be transferred into a qualified retirement vehicle.

Please note that this is a very high-level overview of this process.  Typically, there are many specific steps to be followed to get the QRDO formally approved and instituted by the plan administrator.