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What Happens to My 401(k) During Divorce?

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Your 401(k) may be your most significant marital asset, especially if you’ve been working for quite some time. According to Fidelity, the average 401(k) plan balance reached an all-time high of $92,000 in 2016—which is good news if you’re married but possible bad news if you’re on the brink of divorce. In Florida, your 401(k) is marital property, and so just like a home you buy with your spouse, you must split your nest egg after a divorce.

Qualified Domestic Relations Order (QDRO)

After your divorce decree orders the division of your 401(k), you or your attorney must draft a legal document called a qualified domestic relations order, known as a QDRO. This order tells the administrator of your 401(k) how to divide it to comply with the Employee Retirement Income Security Act (ERISA). The family court judge must approve and sign the QDRO, which the plan administrator must also approve. The QDRO establishes your spouse as an alternate payee so they can receive payments.


Your spouse has three options for collecting their portion of the 401(k): (1) roll the proceeds over into their retirement plan, (2) leave their share intact with yours in the existing plan and take their payments when you retire, or (2) take a lump sum as a cash payment.


Your spouse has a chance to take their portion of your 401k in cash as a one-time deal, at the time your QDRO is approved. Beyond that point, unless they are over 59 ½ years old, they are subject to a 10% penalty for early withdrawal.

If you’re going through a divorce and need legal guidance to deal with your 401(k), contact our Jacksonville family lawyers at Owenby Law, P.A. today. We can provide assistance so that your QDRO is properly drafted and your assets are fairly divided.

Call (904) 770-3141 or contact us online to discuss your case.