Protecting Your 401K & Retirement Money in a Divorce
Apart from your stake in your residential property, your 401K and retirement savings are your most significant asset. And at the time of divorce, this asset is going to be up for division. Yes, your spouse has a right to your 401K savings. There are three steps to dividing your retirement savings. After the division has been ordered by the divorce decree, a Qualified Domestic Relations Order, QRDO, is drafted by your attorney. This order carries information on how the 401K is to be divided. It also elaborates on how your spouse can collect his or her share of your 401K savings. There are three choices available to the alternate payee – add the proceeds into his or her own retirement plan, leave his or her share as it is with yours in the common existing plan, or accept one’s share as cash.
Your spouse’s interest in your benefit is limited to the duration of the marriage. This includes both gains and losses. The distribution of 401K benefits following a divorce is calculated using a particular formula. Sometimes, though rarely, your spouse may be eligible for income to be accrued in the future for work done during your marriage. The amount payable has to be accurately calculated so that neither party is shortchanged.
Alex R. Hernandez Jr. has helped individuals retain their fair share of 401K and retirement benefits. You need a good lawyer to go over the division ordered by the divorce decree. It is also important that the decree take the form of a QDRO as soon as possible, because if it does not then there is a possibility that your former spouse may withdraw the money or if the owner of the 401K dies, then settling accounts can become a tedious and costly affair.
Since we have lawyers who are adept in handling both retirement and divorce laws, we can help you with a fair division of these very important savings.
Contact us today for more information on how we can help you to protect your 401K and your retirement funds. 1-888-HDZ-LAW-8