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401k & Divorce

Gold border around a white square that says “401k & Divorce” in black letters.Many people wonder whether and how Connecticut courts will divide a 401k in divorce.  Connecticut is an “all propertyproperty division divorce state.  That means that Connecticut courts can divide all of either spouse’s property in a divorce — including retirement accounts like 401ks.

Read on to learn more about when and how Connecticut divorce courts will divide a 401k between spouses.

401k and Property Division in Divorce

Connecticut differs from many other states in the way that it handles property division. When you divorce in Connecticut, practically all property is subject to distribution.  This is because Connecticut is an “all property” state.  In other words, Connecticut doesn’t follow a separate vs marital property distinction.

Is a 401k an Asset that the Divorce Court Can Divide?

Many people think that retirement assets that they owned at the time that they got married, like 401ks, are separate property, and will not be divided in a divorce.  Connecticut courts have the authority to divide all property from any source acquired at any time.  In other words, in a dissolution of marriage, courts can divide either spouse’s retirement accounts.

Although the judge may view 401k funds accumulated prior to the marriage differently than other assets in terms of how they divided, it doesn’t mean the court will exclude them from property division entirely.

Read: What is an “All Property” Divorce State?

Read: What Types of Employer Retirement Accounts Are Divided in Connecticut Divorces?

Is there a 401k Calculator?

You may wonder whether there is a calculator to determine how much of their 401k they will need to transfer to their spouse.  Unlike child support, where there is a formula, Connecticut has no formula for either property division or alimony.

Read: How Is Child Support Calculated in Connecticut?

Read: Alimony: The Comprehensive Connecticut Guide

How Will the Divorce Court Divide a 401k?

In Connecticut divorces, how courts divide property is divided based upon “equitable distribution.”  That means Connecticut courts divide property equitably — which does not necessarily mean equally.

The court looks at a series of factors to determine how to divide property.

Read: What is Equitable Distribution?

Read: What Factors Are Considered When Dividing Property in a Connecticut Divorce?

Read: How Are Retirement Plans Divided in Connecticut Divorces?

How is a 401k Split?

But how, as a practical matter, a 401k is split between you and your spouse?  The answer is a Qualified Domestic Relations Order — or “QDRO” for short.  Essentially, the QDRO allows the 401k to be split into two separate accounts without tax consequences.

Read: What Is a QDRO (“Qua-dro”)?

Next Steps

Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals.  Then, we take those goals, analyze them along with the facts of your case, and present you with recommendations and options on how to move forward.

Schedule your Goals & Planning Conference today, or contact us either here or by phone at 860-530-4346.  In the meantime, you may want to check out our Divorce Information and Facts for answers on other family law topics.

Written by Meghan Freed