Thinking about Accounts and Finances
When facing or in the midst of a divorce, keeping practical issues in mind can be almost impossible. All the swirling thoughts and emotions easily make finances seem like the least important thing on earth. However, retirement accounts are considered part of the marital property that must been divided, and how you and your legal representative handle these issues can have major consequences further down the line.
Terms and Concepts
With the idea that knowledge is power, here are a few brief explanations of important terms and concepts related to pensions, 401k plans, and other matters that have to be carefully weighed:
- Immediate Offset Method – once the value of a spouse’s pension has been established, the Immediate Offset Method can be implemented to grant the other spouse an amount of property equal in value.
- Deferred Distribution Method – in this method, a Qualified Domestic Relations Order states that a pension’s value and the resulting property granted to the other spouse involved will be determined once the account actually begins paying dividends.
- Defined Benefit Plan – a defined benefit plan involves a retiree receiving a fixed amount for the rest of his or her lifetime beginning at retirement. In some cases this is known as an annuity.
- Accrued Monthly Benefit Plan – this plan involves a monthly accruing of benefits payable to a retiree if he or she voluntarily leaves a job before a certain fixed date.
Contact Us
If you are currently facing a divorce, getting in touch with a qualified legal representative is crucial to helping you successfully navigate the broad range of financial questions with which you will have to contend. Contact the experienced San Jose family law offices of Daniel Jensen, P.C. today by calling 408-296-4100.
