Retirement was something you always thought that you and your spouse would do together. This was good, because your spouse had a high-paying corporate job and a 401(k) plan. If your employer doesn’t offer a retirement plan, you may not have any retirement savings.
However, your spouse has recently asked you for a divorce. Is it still possible for you to get a portion of these retirement benefits in property division, or are your plans to retire essentially going to be derailed by the end of your marriage?
What is a QDRO?
If your spouse has a 401(k) plan, it is likely a marital asset. This means that it does go through property division, and you may be able to get a portion of it.
A qualified domestic relations order (QDRO) is a court order that is used to divide 401(k) plans in divorce without the divorcing spouses having to pay the fees they’d otherwise have to pay for transferring funds out of those accounts. What percentage of your spouse’s plan you get will likely depend on factors like the length of your marriage and how much of the money in the account was accumulated during the marriage.
Note that QDROs are not needed to divide individual retirement accounts (IRAs) in divorce. Spouses who transfer funds from their IRA to the other spouse as part of the divorce agreement are protected from having to pay withdrawal penalties because they’re considered “incident to divorce.”
Divorcing couples have different types of retirement savings. Make sure you know everything you need to about dividing yours. Having experienced legal guidance will help you ensure that any transfers are fair to you and done correctly.