Divorces are complicated and can get even more complicated if you are nearing retirement. At Simonetti & Associates, our divorce lawyer in Huntington will make sure that you know your options when it comes to your retirement plan and your 401K. We want to make sure that after years of hard work, you get what you’ve earned. The money that you have accumulated while being married that was put into your 401K is considered to be marital property. By planning carefully and knowing your options financially, our divorce lawyer in Huntington will make sure that you make informed decisions.
You have a couple of options when choosing how you would like to split up your 401k.
1. You keep your 401k but your ex-spouse takes all other marital assets, of comparable value.
- This option is the least complicated however you should weigh your options. Consider your long-term financial status as well as the tax consequences that come along with a 401k. You should also consider the long-term value of the assets that you would be giving up.
2. Splitting your 401k or IRA with your ex-spouse.
- This option requires a Qualified Domestic Relations Order, a legal document that has to be signed by a judge which makes your ex-spouse an alternate payee on your account. Your 401k plan will be separated into two accounts so you can continue to manage and add to your account. Your ex-spouse will be able to use the account but will not be able to contribute to it. Consider the fact that you will need to work out issues with your ex-spouse regarding how to properly allocate any funds in the event of repaying any outstanding bills or losses.
3. Transfer the portion of the 401k that’s awarded to your ex-spouse into an IRA account, individual retirement account.
- If you’ve left the company that you established your 401k with and you’re over the age of 59 1/2 then this is an option for you. This allows you to remove your ex-spouse’s share from your plan without having any penalty or tax liability.
Our divorce lawyer in Huntington will help you decide what the best option will be for you and your specific needs.
If you both have 401k accounts, then dividing your accounts will depend on your account balance and how you each come to an agreed plan during the divorce process. This process may be helpful if you would like to avoid additional paperwork and just keep your own 401k.
Whatever you decide, our divorce lawyer in Huntington can make sure you are fully aware of all of your options so you can make the best choice for you. Contact us today to discuss all of your options!