Whether you and your spouse are headed for a divorce or are currently in the process of securing one, you likely have innumerable concerns regarding asset protection. One of these concerns probably has to do with the ability of your former spouse to withdraw money from the 401(k)s that were otherwise meant to fund your retirement.
First and foremost, it is important to note that your former spouse cannot withdraw funds from your 401(k)s without your knowledge ,while you cannot withdraw funds from their 401(k)s without their knowledge. However, this does not mean you are not entitled to any 401(k) proceeds in the event of a divorce.
Typically, any funds deposited in a 401(k) account during the marriage and any appreciation is considered marital property and therefore subject to property division.
Here in Utah, we are an equitable distribution state, meaning a court will divide eligible 401(k) funds both “fairly and equitably.” The court accomplishes this by considering a variety of factors, including the length of the marriage, age and respective contributions of the spouses, etc. Please note, equitable distribution does not necessarily mean equal distribution.
While you don’t have to worry about your spouse withdrawing funds from your 401(k)s, you may still be concerned that they will withdraw/deplete funds from their own 401(k)s.
If this is a concern, you may consider trying to contact the plan administrator of your former spouse’s 401(k) and asking them to alert you in the event any funds are being taken out (i.e., withdrawal, loan). They may or may not be able to do this, however, depending on the governing terms of the 401(k) plan.
If you would like to learn more about divorce, property division or asset protection, you should strongly consider speaking with an experienced legal professional at Arnold & Wadsworth.
This post is provided for informational purposes only and is not to be construed as legal or financial advice.