Getting divorced can quickly take a financial and emotional toll on an individual in California. A major area of concern for those going through divorce is how to handle property division with their retirement funds. Here are a couple of tips for protecting a 401(k) during a divorce proceeding.
First, it is critical to understand the regulations and rules for one's retirement plan. The reason for this is that dividing retirement assets is not like dividing other kinds of assets. Unlike with other assets, the divorce court cannot simply require two divorcing individuals to divide their retirement accounts down the middle. Instead, a summary plan description provides important details regarding how a retirement plan should be split during a divorce proceeding.
Before a 401(k) can be divided, the divorce court has to issue an order called a qualified domestic relations order. This order makes the splitting of the 401(k) official after the judge has signed it. Other plans that a QDRO covers include a thrift savings plan and a 403(b) plan.
Dealing with property division during divorce can be a difficult process, especially if the two divorcing parties cannot find common ground on how to split their assets. In this situation, they must rely on a judge to divide their assets for them. However, if they can see eye to eye in this area, they may be able to create a divorce settlement that satisfies both parties. In either scenario, an attorney can guide a divorcing spouse in pursuing the most personally advantageous property division outcome possible in California.