Fast. Fair. Thorough.

Splitting up 401(k) during divorce requires core steps

On Behalf of | Apr 30, 2015 | Divorce |

One of the most challenging parts of going through a divorce is preparing for the financial aftermath of the dissolution of the marriage. Divorcing individuals in California may be especially concerned about how the divorce will impact their long-term retirement plans. However, splitting up a 401(k) as part of a divorce settlement can be less painful if an individual takes the proper steps.

First, it is wise to have a qualified domestic relations order, or QDRO, draw up. This order tells the administrator of the 401(k) plan how exactly the plan should be divided. The order has to be signed by both the administrator of the plan and the judge.

It is important to note that this QDRO’s details and instructions have to be finalized and approved before one of the divorcing parties can receive 401(k) funds. This means that if the party with the retirement plan ends up retiring or passing away before the order can be finalized and approved, the other party may lose most of the benefits. For this reason, it is wise to get the QDRO filed as quickly as possible when going through a divorce.

An applied knowledge of the law can help individuals going through the divorce process in California to strive for a settlement that takes into consideration one’s retirement goals and financial needs. If two people are able to come to an agreement on how assets such as retirement funds are split, they can avoid further court intrusion. If this is not possible, a judge will decide for them how their property will be divided.

Source:, “9 Tips for Dividing Your 401(k) During a Divorce“, Jerry Shaw, April 27, 2015


RSS Feed