Protect Your 401(k) in a Divorce

by Norris Law Group on September 26, 2014

Protect Your 401(k) in a DivorceEmily McBurney , an attorney in Atlanta with experience drafting QDRO’s offers some advice about how to protect a 401(k) as part of a divorce settlement in an article for the Huffington Post.

  1. McBurney suggests that the most effective way to protect a 401(k) is in a prenuptial agreement. Prenups explain how marital property (or community property) and separate property are to be distributed in the event of a divorce. A skilled divorce lawyer can create a prenuptial agreement that says that a 401(k) and any contributions made to it should be viewed by the Court as separate property in a divorce. A 401(k) will usually be considered to be marital property, and therefore eligible to be split between spouses in a divorce, if such steps aren’t taken.
  2. You may also be able to keep all or some of your 401(k) after a divorce by ceasing voluntary contributions to your 401(k) (provided that you are legally able to do so under the laws of your state).  Any 401(k) contributions made after a couple legally separates are typically considered to be marital property. Divorce cases can take years to resolve after a separation, and a significant amount of contributions may be split as community property in a divorce.
  3. Excluding funds in a 401(k) account prior to your marriage may be another strategy to protect these funds. Only contributions made during the course of the marriage may be considered marital property. If you choose this method, you must keep extremely accurate records of your 401(k) accounts before and after your marriage.

A Qualified Domestic Relations Order, or QDRO, can be a tremendous help when trying to come to a resolution about how a 401(k) may be included as part of a divorce. Graham Norris is one of just a few attorneys with the knowledge and experience to draft QDRO’s for residents of Idaho, Utah, and Wyoming.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

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