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What happens to a 401(k) plan in a California divorce?

When a marriage ends in a community property state such as California, marital assets will be subject to an equal split. One of those assets might be a 401(k) plan -- at least the contributions that were made to it during the marriage. Any funds that were added to the plan before the marriage will not be eligible for distribution in a divorce because they would be separate property that belongs to the contributor.

This might also be the appropriate time to look at all other assets that were accumulated during the marriage. Although divorce law in California splits marital assets 50/50, absent a pre or postnuptial agreement, divorcing spouses often negotiate the way they want their property to be divided. However, a final agreement will need the court's approval.

To make the agreed division of a 401(k) retirement plan valid and final, a Qualified Domestic Relations Order must be filled out by an attorney or a financial adviser resourced by the lawyer. The document must be presented to the court to indicate how the retirement plan must be split. Once a QDRO is formally issued by the court, the plan's administrators will then be required to add the spouse as a payee or beneficiary.

Navigation of property division in a divorce can be a challenging process with multiple tough decisions related to a person's future financial stability. For this reason, most California people seek the skills of an experienced divorce attorney to guide and support them throughout the legal proceedings. A lawyer can explain the legal rights, and make sure that all the right steps are taken.

Source:, "3 Steps to Divide Your 401(k) During Divorce", Shawn Leamon, Accessed on March 2, 2018

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