401K division question

iVillage Member
Registered: 06-05-2006
401K division question
3
Thu, 11-16-2006 - 3:31pm
Can anyone tell me how there 401k got divided.
I plan on divorcing my husband early next year and will get half his 401k per michigan law. But I don't know if it will be sold and then we split what is left after paying taxes. Or if they just transfer half the money into my account.
I know I need to ask my lawyer this, but I am not seeing her for another several days and was just wondering how it worked for other people.
Thanks
Vailgal
iVillage Member
Registered: 08-17-2001
Thu, 11-16-2006 - 5:27pm
It's not as simple as you'd think it would be. You need a QDRO (Qualified Domestic Relations Order) signed by a judge in order for 401(k) monies to change ownership. When your lawyer files the divorce papers, there should be QDRO papers in the packet. Those have to be filled out EXACTLY right or the company holding the 401(k) will kick them back. I've heard horror stories from my lawyer about filling out 2 sets of papers for different couples but the same holding company. They were filled out IDENTICALLY, and one got kicked back and one didn't. But it all works out in the end. Mine went through first time!!

~calla~  mom to rosie and gracie

iVillage Member
Registered: 05-23-2006
Fri, 11-17-2006 - 10:17pm
Any divorce attorney should have no problem with the paperwork necessary. Unless your ex is leaving his job, his $ will stay put. You need to think about what you are going to do with your half BEFORE all this is done. If you do not want to pay taxes AND a penalty, you need to have an account for it to be rolled over into. That's what I did. I never actually had the $ as it went directly from my ex's company to the new investment company.
iVillage Member
Registered: 09-12-2003
Sat, 11-18-2006 - 2:44pm
Excellent thoughts and pointers... thinking ahead is the name of the game.