The process of dividing marital wealth is never simple or easy, and many New Jersey spouses experience a great deal of stress as they negotiate the division of shared assets. One thing that can make this process even more complicated is the range of fees that can accompany various property division actions. Determining these fees ahead of time can make it far easier to devise well-informed and savvy decisions.
One of the most common fees involves the preparation of a qualified domestic relations order, or QDRO. This is the document that sets out the manner in which a 401(k) account should be divided between spouses. While some 401(k) plan administrators do not charge a fee for preparing this document, others view the task as an opportunity to boost profits.
The cost for preparing a QDRO varies, and can range between $300 and $1,200. That can be a significant expense for many couples, especially if the total value of the plan is not high. For some, it may make more sense to leave the plan intact, and for the other spouse to accept a greater share of other assets to make up for the lost value of the 401(k).
New Jersey spouses often want to minimize their expenses while moving through the property division process. One way to accomplish that goal is to be aware of the fees that come with various asset types, and plan accordingly. With proper effort, both spouses can walk away with a greater share of marital wealth, which can make it easier to move into the next phase of life.
Source: Bloomberg, "The Divorce Penalty: This 401(k) Fee Can Add Insult to Injury", Suzanne Woolley, Jan. 23, 2017