Dividing Retirement Assets in Divorce

Dividing retirement assets is an important consideration when you’re facing divorce.

By Womans Divorce Staff  | Answers by Brette Sember, J.D.

Next to the marital home, retirement assets often account for a significant portion of a couple's net worth. It is a big mistake to not include retirement accounts when negotiating your divorce settlement. You can either seek to receive your fair share of the account or trade your portion of the account for equity in the marital home or something else.

As a general rule of thumb, a spouse is entitled to half of the value accrued during the marriage in any retirement accounts. If the account was opened after your marriage, then the total value of the retirement account is subject to division. If the account was established prior to the marriage, you will need to take into consideration any contributions that were made or accrued to the account during the marriage.

The different types of retirement plan assets include:

If you or your spouse have retirement assets, it is important to speak with a qualified divorce lawyer or a Certified Divorce Financial Analyst to help you decide the best way to split these assets. You also need to be aware of how division of these assets should be handled. Early withdrawals from a retirement account could be subject to taxes and a penalty if not handled correctly.

For a traditional IRA or Roth IRA, the plan can be divided without penalty by submitting the divorce settlement agreement to the plan administrator and filling out some forms which will be signed by the plan’s owner. This process is known as a transfer incident to divorce. The division of the IRA needs to be completed within a year after the divorce is finalized to avoid a tax penalty.

For employer provided plans such as a pension or 401(k), you will need a Qualified Domestic Relations Order (QDRO) to split the assets and avoid any early withdrawal penalties. A QDRO is a court order outlining the division of the retirement asset. It’s important to note that each type of plan requires specific language, so your QDRO will need to be approved by the plan’s administrator to ensure it meets the plans requirement for division. It also needs to be approved by a judge. Once the order is signed, it allows the plan's administrator to divide of the benefits allotted to each spouse according to their settlement agreement.

FAQs about Dividing Retirement Assets

Ultimately, there are a variety of factors that will influence retirement account division, including when it was accrued, your state's theory of property division, the other marital assets, and how your settlement is framed. The following FAQs about dividing retirement assets can help you understand how such plans are divided, what paperwork is needed, when payout happens and more.

Division of Retirement Assets

QDROs and Paperwork Needed to Divide Retirement Accounts

Retirement Plan Payouts

Dissipation of Retirement Assets

Post-divorce Retirement Issues

Am I entitled to any of his pension?

Elaine's Question: I've been married almost 33 years. We are retired and live on his pension as I am too young for Social Security. If we divorce, will I have any rights to part of his pension? Without that, I'd have no income for a minimum of 6 years.

Brette's Answer: When you divorce, you are entitled to be supported by your spouse, which includes taking a percentage of his pension. You are also entitled to a portion of the assets of the marriage, as well as part of your spouse's future Social Security income. It would be wise to consult with a family law attorney to discuss the details of your situation.

How will my pension plan be divided?

Karen's Question: As a teacher, I have a state pension retirement account presently valued at over $40,000. When we divorce, does my husband get 1/2 of the cash value or present value of my pension fund?

Brette's Answer: You'll need to speak to a lawyer who practices in your state. There are a variety of factors that will influence the division of a pension, including when you accrued it, your state's theory of property division, your other marital assets, and how your settlement is framed.

Is my husband entitled to half of my 401K?

Nikki's Question: I live in an equitable distribution state. My husband worked very little over the years by choice, had a provable open affair and has been in trouble with the law for substance abuse problems (he is currently on probation). Is my husband entitled to 50% of my 401(k) when divorcing?

Brette's Answer: Equitable distribution means assets and debts will be distributed in a way that is fair, not necessarily 50/50. Whether your spouse is entitled to part of your 401k or to any assets will be dependent on the big picture. The fact that he had an affair is probably not relevant, unless your state allows that to be considered in property distribution. Each party's financial situation is relevant. Talk to your attorney.

Can he get half my retirement if we've only been married 3 years?

Maribel's Question: After three years of marriage, I'm filing for divorce. I have a 401K and a retirement plan which I had way before I ever met him. He thinks he will get half of my 401K and retirement money, when HE has not paid in to either of these accounts.

Brette's Answer: He won't get half. All of your marital assets will be considered (and only the portion of those accounts that accrued during marriage are marital assets). You've only been married three years, so it's unlikely he'll get much.

Can we agree to each keep our own retirement funds?

Kelly's Question: We have been married 25 years. I am a teacher and have a sizable pension. He is a laborer and has a small retirement account. We want to do mediation and settle things for ourselves. Can we agree to each take our own retirement funds even if mine is much more? If he agrees to relinquish his half in mine and keep his, will that work?.

Brette's Answer: If you both agree after being completely informed about the amounts, you should be able to do so if the court approves it. Discuss this with your mediator as an option.

Are the pension laws different in each state?

Diane's Question: According to my divorce, I am supposed to receive half of my husband's profit sharing plan. According to my attorney I am entitled to 1/2 of any deposits after the marriage, not 1/2 of interest/natural growth. The divorce happened in NY. I now live in Colorado. I asked a couple of local attorneys and they said that I am entitled 1/2 of any growth, interest included. Are the laws different in each state?

Brette's Answer: No, your divorce decree is interpreted under NY law. It sounds like your first attorney either explained this incorrectly or misunderstood it. Anything your spouse earns after the divorce is not subject to property division. If your first attorney is sure that is what you are entitled to, ask him to enforce it.

Is the 401K value determined at the filing date or the trial date?

Gina's Question: We are working cooperatively toward divorce, however we have stalled in one particular area related to my 401k. Do we look at the value of the 401k at the time I filed for divorce or do we look at the value at the time of the trial?

Brette's Answer: Generally assets are valued on the separation date, but you want to date all assets to the same date.

How are the funds split if he rolled his 401K over into an IRA?

Mary's Question: My spouse had a substantial amount in the 401K account when we married and the account has accrued a lot more during our marriage. I know that in a divorce I am entitled to half of what was accrued during the marriage. But what if he retired and rolled the money into an IRA.  Am I still entitled to half of the money accrued during the marriage?  Also if he starts withdrawing on the retirement account, does that entitle me to less if we get divorced?

Brette's Answer: It doesn't matter where the funds are - if they are marital assets, they are subject to division. Generally assets are valued as of the date of separation, so withdrawals after that date would not impact your share. Talk to an attorney in your state for detailed information and personal advice.

How would Tier 1 and Tier 2 railroad retirement be divided?

Brette's Answer: You should seek an attorney who has experience working with those specific types of accounts because they are highly specialized. In general, the portion of the account that accrued during the marriage is a marital asset and will be divided in the divorce.

Should we split the retirement now or wait till the value rises?

JoAnne's Question: I'm currently in divorce negotiations. We both want an uncontested divorce. However, when it comes to my soon to be ex-husband's 401k, he wants to wait until the market value rises and then split the money 2-5 years from now instead of giving me the money now. What do you think of that?

Brette's Answer: I think that half today equals half in 5 years plus interest. He's getting the same amount either way. It's easier to do it all now than have to try to resolve unfinished things in 5 years when you've both moved on. You should consult with an attorney about what would be the best thing for you to do. Good luck.

Is he allowed to use my retirement information in court?

Abigail's Question: My ex obtained a printout of my military retirement record illegally. This has my date of birth, social security number, and my earnings. He used it in court as evidence for more money. Shouldn't my lawyer have done something about this?

Brette's Reply: You would need to provide that information to the court anyhow.

How do I get a court order to access his retirement information?

Rose Asks: We're in the process of divorcing and are still trying to settle. I just found out my soon-to-be ex cashed in half of his 401K/rollover IRA in April of this year. I called the fund company and they won't give me copies of statements unless the court orders them to. I get legal advice through the self-help department of the courts.

Brette's Answer: Ask the self-help department to help you prepare a subpoena the court will sign which will allow you to get the documents. You'll need to show the court what he withdrew and when and he'll be held accountable for it.

Who handles the paperwork for thedivision of a retirement plan?

Joanie's Question: I am supposed to be getting a certain amount of my husband's 401K and retirement fund. When I ask my lawyer, she says she doesn't handle this, my husband does. Is this true?

Brette's Answer: The plan administrator has to do it and your husband has to get the paperwork going. However, your attorney should follow up with his about it.

What happens after the court awards me part of his retirement?

Emmy's Question: My ex was court ordered to pay me half of his 401K. How long is this process? It will be 8 months and not a word from anyone.

Brette's Answer: You've got to submit a QDRO (qualified domestics relations order) which then gets submitted to the 401k administrator.

How do I get QDRO papers?

Cinthya's Question: The Judge granted me with half of my husband's 401k. I have contacted the 401k representative and the lady asked me for the QDRO copies. I have gone through my papers and can't find it. Where I need to get those papers?

Brette's Answer: A QDRO is a document that must be prepared by an attorney because it is very complicated. Some companies may be willing to assist you in preparing it, but in general they don't feel it is their responsibility.

Why is my lawyer charging me for filing the QDRO papers?

Kristen's Question: My ex-husband has been awarded half of my 401k. Our QDRO has been prepared and is ready to be submitted to the court for the judge's signature. My lawyer wants to charge me $300 JUST to file the paperwork with the court. Is this something I can do myself?

Brette's Answer: I find it hard to believe the $300 is simply to mail the form in - are you sure that does not include some of the preparation? You will need to pay the attorney for completing the form. You could offer to come pick it up and take it to the courthouse yourself if that would save some money, but your attorney likely has a motion prepared to go with it or correspondence to the court explaining what it is and what needs to be done.

How do I get the judge to sign the QDRO after the divorce is final?

Kimberly's Question: I did my own Pro Se divorce and it was finalized last month. I forgot to bring the QDRO and have the judge and clerk sign and date it the day of divorce. The company will not accept the QDRO without this. How can I easily fix this small glitch?

Brette's Reply: Call the court clerk and find out what procedure they need you to follow. If the order specifies division of this, you may be able to just submit for signature.

What if my ex won't sign the QDRO after the divorce is finalized?

Ceceila's Question: My divorce was final 2 months ago and during mediation we both agreed that I would receive half of his 401k. He has since decided he does not agree with this and has refused to sign the QDRO. Can he get away with not signing?

Brette's Answer: If your settlement is signed and accepted by the court and incorporated into your order, then no he can't. You have to go back to court to file papers for a violation/enforcement of the order.

Do I need an attorney to reopen the divorce to get a QDRO order?

Sher's Question: I was married 19 years to an Air Force officer. My ex told me because Delaware (where the divorce was filed) was not a community property state, he did not have to pay me any of his future retirement. Now I have learned about the USPA and want to seek to re-open the divorce and ask for a QDRO order. I got the form from the DE court to ask to re-open the case. Do I need to have an attorney to take this to court and get the QDRO approved or is alright/acceptable to do this myself?

Brette's Answer: You need an attorney to handle a QDRO.

He never gave me the release to speak to the plan administrator.

Catherine's Question: I was divorced 12 years ago. The decree states that I am entitled to a portion of his retirement based upon the time we were married. He was supposed to give me a release to speak with a plan administrator, but has not to date. He is taking funds out of the account now and I am wondering what my options are.

Brette's Answer: Get an attorney and go back to court because he has violated the order.

How do I collect my part of his pension?

Cecilia's Question: In my divorce settlement, I am entitled to 1/2 of a pension provided by the place my husband works for. How do I collect it?

Brette's Answer: To get your pension pay out you have to talk to the plan administrator.

What if the pension payout is less than the divorce stated?

Awilda's Question: My original lawyer retired and his son took over the firm. He continued to finalize my QDRO's by drafting them and finally getting approval from the company. My ex retired last May and now that the amount that I had been receiving of $540 has been reduced to $308. I have contacted the attorney who drafted the QDRO's, and he insists on having to charge me again because his father never paid him to finalize the documents. What can be done other than have this attorney investigated. My ex signed a paper stating that he would pay me $540 per month and the attorney has that paper. What recourse do I have?

Brette's Answer: You need to pull out all documentation you have from this law office - retainer agreement and invoices. This should indicate if you paid for this work or not. If you have paid for it, you need to contact your state bar attorney grievance program and file a grievance. They will investigate. You also need to understand exactly what the QDRO paperwork says. With the fall of the stock market, there is likely less in that account.

Do I wait until he retires to receive part of his pension?

Debbie's Question: I was awarded half of my ex-husband’s pension and he has recently turned 62. I have a QDRO on file. Do I have to wait until he decides to retire before I can collect my half?

Brette's Answer: This needed to be determined as part of the divorce judgment. You should talk to your attorney about how to enforce your QDRO and when your funds will be disbursed.

Do I have to wait until he retires to get my part of his 401k?

Gina's Question: If I want part of my ex-husbands 401k, do I have to wait until he retires to get it?

Brette's Answer: No, if you are awarded part of your spouse's 401K, your part is removed upon issuance of the judgment or order. However, in order to get this money, you need an attorney to prepare a QDRO - qualified domestic relations order, which must be written to meet the specific 401k plan requirements. When you get the money, you roll it over into an IRA for your own retirement purposes.

How will it affect pension division if he eventually remarries?

Julia's Question: My husband wants a divorce and he has 2 private pensions which are payable when he retires. Would I be entitled to any of his pension when he retires? If he remarries, what would the situation be? We have been married for 23 years.

Brette's Answer: Yes, you would likely be entitled to a portion of the pensions. You need to hire an attorney for this. If he remarries, it would not change what you are awarded in the divorce.

Can I liquidate my part of his pension to buy out his equity in the house?

Teresa's Question: Can I be awarded husband's 401k and use it as liquid assets immediately? I will need the money to pay him equity in the house.

Brette Answers: If you liquidate it you'll pay a penalty and taxes. Why aren't you asking to off-set the fund against the equity instead?

Can he buy back the portion of his pension that was awarded to me?

Question: My ex wants to buy back the pension that was awarded to me. How can we do this?

Brette's Answer: You need to be careful about this and consult an attorney. The best plan is probably to modify the decree to reflect this.

Would he get 1/2 my pension if it was withdrawn prior to filing for divorce?

Stephanie's Question: Say I quit my good job in July for a less-stressful, lower-paying job which starts a month later and didn't tell my spouse. Upon quitting, I opted to have all my pension funds withdrawn into my private checking account, instead of rolling them over into another IRA-type fund. Now my spouse serves me with divorce papers in September. During August I may have lost all the money at the casino or stuffed it in my mattress. Would my spouse have any grounds for getting half my retirement?

Brette's Answer: Your pension is a marital asset and you could be responsible for dissipating that asset. If you withdraw in July and divorce is begun in Sept you have an argument, but the problem is your spouse didn't know about or agree to what you did. And if you knew a divorce was coming, it doesn't look good. You need to see an attorney about this.

Will giving retirement funds to my child prevent my husband from getting them?

Kim's Question: We're in the process of an uncontested divorce, but now he has stated that he wants 1/2 of my 401k. Can I take money from my 401k and give it to my daughter as a gift to avoid my husband getting the funds?

Brette's Answer: First of all, if you disagree about your 401k, your divorce is not uncontested; unless you have filed papers and he has either not responded or has filed paperwork stating he is not contesting it. If that is the case, he has no say over the division of the assets since he has waived his right to participate.

If you are in a situation where that has not happened and you agree about everything but this one situation, that's different. No, you cannot take money out and give it to your daughter. The money is a marital asset which must be distributed in your divorce. Good luck.

How can I prevent him from taking cash out of his pension?

Faye's Question: We're separating and I have found out that he is taking cash out of his pension plan. Am I entitled to half of the pension money?

Brette's Answer: To stop this, you need to open a divorce or separation proceeding and ask for an order estopping him from dissipating marital assets. You have an interest in his pension since it is a marital asset. How it will be divided will be decided by the court as part of your overall financial order.

What if he cashed out his retirement after I filed for divorce?

Debbie: My soon to be ex has dissipated marital assets by selling shares from his 401k after I filed divorce papers. He basically sold almost everything that was in it. I informed my attorney about it, and she knows what was in the account when I filed divorce papers and knows what is in it now. Can he be held responsible and will I still get my fair share since we know he did it and have all the dates of when he did it?

Brette's Answer: Yes, it's marital property. Your lawyer will be able to obtain the records showing what was withdrawn when and it will be accounted for in the divorce. You won't lose out because of it.

Can I get any of his retirement if the divorce was finalized 5 years ago?

Judy's Question: Is it possible to sue for any retirement accounts after a divorce has been finalized 5 years ago?

Brette's Answer: It is possible, but to change the terms of the financial settlement you either need to show that there wasn't proper disclosure at the time of the judgment, or that there's been a change in circumstances. You should pull out your divorce decree or settlement and read it and possibly consult an attorney who can interpret it. This should have been handled at the time of the divorce, and most likely was. If not, it is something that could be revisited. You should talk to a family law attorney who can discuss the particulars of your situation in light of your state's specific laws and requirements.

Can he reopen the divorce to remove the retirement clause?

Martha's Question: My husband and his ex were divorced about 9 years ago, and she received 1/2 of his retirement in the uncontested divorce. Can he reopen the divorce after this amount of time? His retirement is coming up and we feel he has been ripped off.

Brette's Answer: You don't get to go back and have a case redone just because you think it didn't turn out the way you wanted. He could have appealed at the time, but the opportunity for that is long past.

Can I fight the division of my retirement account after the divorce is over?

Jane's Question: The judge in our proceedings awarded my ex 50% of my teacher retirement. My ex had no retirement or pension. Would it be feasible to go back to court and fight this? My attorney appealed with no luck.

Brette's Answer: No. The decree is final and so is the appeal. Go see another attorney if you want another opinion.

Can I re-qualify for part of my first husband’s pension if my second marriage ends?

Tricia's Question: If a second marriage disqualifies me from my first spouse's retirement and pension, would I re-qualify if my second marriage ends in divorce?

Brette's Answer: No. Once you remarry you are disqualified. Talk with your attorney who can explain the details of your divorce decree.

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