When going through a
divorce, your 401k and retirement plan is perhaps the most significant and complicated
marital asset – because your 401k is something you’ve been
consistently contributing to throughout the years of your marriage, it
is considered as marital property. In this blog, our Las Vegas divorce
attorney explains how a 401k is split in a divorce.
What is a QDRO?
Splitting a 401k is a process that entails three different steps. First,
your divorce decree must order the division of your 401k. Secondly, your
divorce lawyer will draft a qualified domestic relations order (QDRO)
to tell inform your retirement plan’s administrator how to divide
the 401k in a way that is in agreement with the Employee Retirement Income
Security Act. Once the QDRO is approved and signed by a judge, it must
also be approved by the plan administrator. After the QDRO is established
and finalized, your spouse will be listed as an “alternate payee.”
Distributing the 401k
How your spouse chooses to collect his or her portion of your 401k is up
to them. The funds can be rolled over into your spouse’s respective
retirement plan or the funds can stay in your current 401k. Should your
spouse choose to leave the funds intact, he or she will simply take payments
once you retire. Your spouse also has the option of taking their share
as a cash payment.
If you are the spouse receiving benefits from your husband or wife’s
401k plan, it’s imperative that you and your divorce attorney file
and submit your QDRO as soon as possible. Until the divorce is finalized,
your benefits are very vulnerable – should something unexpected
happen in the course of your divorce, you could likely lose your benefits.
Having an experienced dedicated Las Vegas divorce attorney on your side
can make all the difference in your case. Call Leavitt Law Firm at (702)
request your free case evaluation.