Can I get his or her 401k? Will the 401k plan be divided upon divorce? These are common questions asked by those going through a dissolution of marriage.
When you get a divorce, either you (jointly with your spouse) or the court will decide how your assets are going to be divided. If you have a 401(K) retirement plan, your spouse and/or your dependents might actually be entitled to a share of proceeds; if they are, the court will issue a qualified domestic relations order [QDRO]. Qualified Domestic Relations Orders are the vehicle for dividing your 401(k) plan and giving a a portion of those proceeds. The qualified domestic relations order is actually a court decree naming these other individuals as recipients. If you are subject to qualified domestic relations order, your need to provide the administrator of your 401(k); a copy (usually a certified copy) so that they know the recipients of 401(k) funds are. This is typically handled by a family law attorney or QDRO professional.
Your wish to safeguard your funds may be is normal, as is your question as to whether you share in your spouses 401k plan on divorce. Typically, a spouse has the legal grounds to seek their share of the marital portion of 401(k) benefits in a divorce settlement or trial. In most cases, you will have to find a way to make a fair and equitable division of the funds. Always ready about your legal options and rights, you can divide your 401(k) reasonably. Make sure that tax consequences are properly allocated. You can discuss this with your family law attorney or accountant.
Every 401(k) plan has its own set of benefit provisions and rules. While some plans divide funds by percentage, other divides by shares. Some permit a distribution of the ex-spouse’s portion at the time of the divorce, others require recipients to wait till retirement (this is typically not done with traditional 401k plans but rather with items like pensions, etc).
So, if you are wondering if you can get his or her 401k or how the 401k plan will be divided in a divorce case, talk to your family law lawyer and your financial planners about how to divide the 401k on divorce. You can look at the details of your plan’s 401(k). Be aware of the details, including when the plan was formed and consider the date of marriage and the date the petition for divorce was filed in dividing 401(k) in divorce. Qualified family law attorneys can serve as a valuable resource if you are negotiating with a spouse on how to split your 401(k) assets.