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Fighting for your 401k

On Behalf of | Apr 17, 2020 | Divorce |

Your divorce is almost certain to impact the plans you envisioned for your life in Stamford. Yet one area where you may believe that impact to be the least (especially if you are still relatively young) is your retirement. That assumption might quickly change when you discover that your 401k is subject to property division. 

Many in your same position have come to us here at the Prince Law Group LLC wondering is there might be a way to keep their 401k’s from bein divided. There indeed is, yet it can introduce added complexities to your proceedings. 

Retaining your full 401k 

The first point to remember is that it may not be your full 401k that is at stake; rather, the portion dealt with during property division proceedings are those contributions made to your account during your marriage. If you want to keep those funds (thus keeping your current retirement plans intact), then the 401k Help Center proposes a potential solution: ask that your ex-spouse give up their claim to them in exchange for you relinquishing your interest in another marital asset. 

Is it worth it? 

That seems simple enough, right? However, before you immediately press for this, you should first consider what you could potentially be giving up. The court would view “comparable value” in this situation as being the future value of those 401k funds due to your ex-spouse. That projection would include any potential growth from earned interest and investment returns that could materialize in the years until you reach retirement age. If you are still several years from that point, that growth might be significant. This means that you may have to give up a significant asset if you want to keep for full 401k now. 

You can find more information on the dividing marital property throughout our site.