The distribution of assets during divorce proceedings go farther than bank account holdings and household income. To reasonably split the finances accrued during the course of your marriage, you also have to deal with the finances you put in your 401(k) accounts. Your divorce attorneys in Denver, Colorado will explain the protocol in your state, but you can thoroughly understand the procedure by knowing how courts split it for couples.
1. Decide Between Marital and Separate Property
When dividing your 401(k) accounts, the first step is to identify the total finances you both put into the account during the marriage. The courts won’t really consider finances deposited before the marriage eligible for sharing to both parties. Generally, assets that either of the spouses owned before the marriage, such as 401(k) funds, are separate property. On the other hand, if both of you contributed to the 401(k) accounts during the marriage, then you will most likely divide the finances.
2. Estimate the Splitting of Shared Assets
The state where you live will conclude how to split your whole assets throughout the divorce proceedings. Most community-property states will divide the 401(k) funds that qualify as marital property evenly among the parties. In equitable distribution states, however, the judge could choose to divide the assets in a different manner for they would rather look at the big picture.
3. Finalize the Division Through a Qualified Domestic Relations Order
Besides acquiring a properly accomplished divorce decree, your lawyer should complete and present a qualified domestic relations order concerning your retirement account. This order will specify that the account should be divided based on the divorce order. As soon as the account administrators and judge approves it, they will place your name on the 401(k) as an additional payee.
With the above process, you will be able to claim the retirement property owed to you during the divorce. Ensure that you take your time in maneuvering the allocated 401(k) plans to protect you financially in the future.