While it is possible to be awarded some of your former partner’s 401k, it is certainly not a given in every divorce. A family court judge must approve and sign a Qualified Domestic Relations Order, commonly referred to as a QDRO (kwa-dro), then the plan administrator must also approve it since the administrator is accountable to the government if the order is insufficient in any regard. This order provides details to the admin of the 401(k) how to divide the account, in compliance with the Employee Retirement Income Security Act, or ERISA. In an equitable distribution state, the court makes their determination largely based on factors such as the spouse’s financial situation, their respective ability to earn income, as well as the length of the marriage, in order to divide the assets in a fair and reasonable manner.

The QDRO must detail the process for collecting the money that the wife desires, and will direct the admin how she would like to proceed. The wife can roll the proceeds into her own retirement plan, or she can also choose to leave her share intact with the husband’s in the existing plan, taking her payments when he retires. Another option is that she can elect to take the money as a cash payment.

The distribution of assets like retirement accounts can be complicated but is a very important aspect in the grand scheme of the settlement. The longer the marriage, and concurrently, the more contributions that have been made to the account during the marriage, plays a major role when the court is deciding how to assign distributions. 

The QDRO must detail the method the wife chooses and direct the plan administrator how she wants to go about the process. The proceeds can be “rolled over” into her own retirement plan if she has one, or she may leave the share intact with the existing plan, taking her payments when it is collectible, upon retirement. A third option is simply to receive a lump sum payment.