How are retirement accounts divided in a US divorce?
Marital portions of 401(k)s, IRAs, pensions, and other retirement accounts are divided as marital property. The marital portion is generally the amount accumulated during the marriage. A Qualified Domestic Relations Order (QDRO) — a court order sent to the plan administrator — is required for most employer plans (not IRAs). Without a QDRO, early withdrawal taxes and penalties apply.
What is a QDRO and do I need one?
A QDRO (Qualified Domestic Relations Order) is a court order that directs an employer's retirement plan to pay a portion of the account to an alternate payee (the non-employee spouse). QDROs are required for 401(k)s, 403(b)s, pension plans, and most employer retirement plans. IRAs are divided by a different mechanism (a transfer incident to divorce). QDRO preparation typically costs $1,000–$3,000.
Is a 401(k) split 50/50 in a divorce?
In community property states (AZ, CA, ID, LA, NV, NM, TX, WA, WI), the marital portion of a 401(k) is generally split 50/50. In equitable distribution states, courts divide the marital portion equitably — which is usually 50/50 but can differ based on circumstances. The marital portion is only the amount contributed during the marriage; pre-marriage and post-separation contributions belong to the account holder.