Questions about Retirement Benefits


#1

Hi. My stbx and I are currently working back and forth on a separation agreement. Originally I was not going to claim half of his 401k (even though I realize I’m entitled to it per NC law) but have since re-thought the situation and plan to include that in the agreement.

My first question is, if that is in the agreement, what additional paperwork, if any, needs to be included to insure that I receive the amount due me?

My second question is what if, during our discussion over the agreement before it is signed, he were to go in and start withdrawing money from his 401k account so that when the agreement is signed there is little/nothing left in the account?

Thank you for your help.


#2

A 401(k) can be divided using a QDRO (qualified domestic relations order). You will need to file a Complaint for Equitable Distribution of Retirement benefits, and then submit the QDRO for the judge to sign. You do not have to have an attorney, but I recommend you do consult with one to help you ensure the documents are correct.

As far as what you are describing him potentially doing with the 401(k), be aware that this will likely be considered a dissipation of marital assets. There will be consequences to him if he does this if you challenge it in an equitable distribution. You could challenge the withdrawal of cash as wasting of marital assets. If the judge agrees with you, then those monies will be put back into the marital pot and you will receive your share of those items as if he never spent them. In other words, you will receive an unequal distribution of the marital estate in your favor because of his actions. If one party alleges waste, it is up to the judge to decide. Withdrawing large sums of money from your 401(k) right before a separation will almost certainly be viewed as an attempt to avoid distribution.


#3

Thank you.

Where do I get a QDRO? And how do I go about filing the Complaint and when?


#4

I would highly recommend you have an attorney handle this for you. Drafting QRDOs can be tricky. All transfers pursuant to separation and divorce are supposed to be tax free, which is why you need the QDRO. Also, you will want to ensure that you do not lose any of your future benefits, so the language in your separation agreement needs to be correct concerning the transfers.

If you do decide to go it alone, you should request a sample QDRO from the retirement plan itself before moving forward and trying to draft it on your own. When you file your divorce complaint, you will need to include a claim for Equitable Distribution of retirement benefits, then submit the QDRO for the judges signature on your actual court date.