PHOENIX/MESA, AZ, April 28, 2009
/24-7PressRelease/ -- During the dissolution of marriage, spouses have important issues to consider, including spousal support, child custody, child support and distribution of property. Not to be overlooked in the distribution of property is how to divide and protect the 401(k).
A section 401(k) plan is a type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pretax basis. The plan allows a worker to save for retirement and have the savings invested while deferring current income taxes on the saved money and earnings until withdrawal.
Most commonly employees select from a number of investment options, usually an assortment of mutual funds that emphasize stocks, bonds, money market investments or some mix of the above. In the case of divorce, properly dividing and protecting the valuable, long-term asset is critical.
"With home equity values falling, the 401(k) may be one of the most valuable assets to divide in a divorce," says attorney Paul C. Riggs, one of Gibson Ferrin & Riggs' founding partners.
Riggs, who has been practicing law since 1988, says that a qualified domestic relations order must be prepared by the court to divide a 401(k). A QDRO is a legal order that splits and changes ownership of a retirement plan to give the divorced spouse his or her share of the asset or pension plan.
"That orders the third party benefits manager that is holding the 401(k) to distribute it according to the terms of the order," Riggs says.
He explains that it is typically divided using the following formula: The number of months married is the numerator, the number of months that the spouse was employed is the denominator, and then divide the number by two.
"This gives you each party's one-half community share in the 401(k) fund," he says.
Riggs handles divorce (contested or uncontested), child support, child custody, spousal maintenance, visitation, legal separation, post-decree modifications, sophisticated community property division, pre-marital agreements, stepparent adoptions, as well as other family law related cases.
During more than 20 years of practicing law, Riggs has developed a reputation in the East Valley as a fair, but aggressive attorney, representing the rights of his clients.
About Gibson Ferrin & Riggs, PLC
Gibson Ferrin & Riggs, PLC concentrate their practice on serving small business owners and their families with business related issues, estate planning and family law. They can help identify and assess the things that matter most to you and work to preserve, protect and promote them. The firm's expertise in family law, business law, commercial litigation and estate law is recognized throughout the Phoenix/Mesa area.
For more information on how individuals can protect their assets during divorce, please call attorney Paul Riggs at 480-633-8100 or visit the website at
www.gfrlaw.net.
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Press Release Keywords:- phoenix/mesa law firm, phoenix/mesa attorney, business law, estate planning, commercial litigation, family law, attorney paul riggs, paul c. riggs, child support, child custody, 401k, 401(k), divorce, dissolution of marriage
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