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Remember the 401K in divorce property division

There are several assets which tend to be overlooked in a divorce. A spouse's retirement plan, such as their 401K is one of those assets. There are a few requirements that must be met, but once this is done, the 401K can be made a part of the divorce property division. These laws not only apply in Florida but in the rest of the country as well.

According to federal law, an employee's 401K cannot be assigned to anyone other than the employee. That includes the employee's spouse. This law was put into place to make sure that the retirement benefits that a company grants an employee actually go to that employee. But there is an exception to this rule. 

The law carries an exemption that will allow the money to go to an alternate payee. If all legal procedures are followed, the local divorce court will be allowed to order that a part of the 401K is distributed to the employee's spouse. At that point, a special order has to be drafted by the court and approved.

So to put it simply, yes, a spouse can be granted part of an employee's 401K in a divorce, but only after the federal requirements have been met. This retirement benefit is not something that should be overlooked when going through a divorce in Florida. In order to make the process as simple as possible, a person and his or her spouse may choose to discuss the 401K with a divorce mediator so that an amicable property division can be reached.

Source: normantranscript.com, "Don't overlook a 401(k) in a divorce", Julie Jason, June 25, 2017

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