How to Determine Value of 401(k) in a California Divorce

by Kay Lee
California is a community property state, meaning the portion of the 401(k) earned during the marriage is jointly owned property.

California is a community property state, meaning the portion of the 401(k) earned during the marriage is jointly owned property.

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California is a community property state. This means that when couples are dividing property in a divorce, anything earned or obtained during the period of marriage is considered jointly-owned property. Accordingly, unless otherwise agreed upon, a 401(k) account earned during the marriage is split equally between the parties. Since the value of a 401(k) plan is not static and continuously earning investment income, and there are both state and federal laws that mandate specific actions, certain rules apply as to how the account is valued for distribution as part of a divorce.

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Step 1

Negotiate with your spouse or partner to determine how you will divide your assets. While the court has jurisdiction to divide a couple’s property during divorce, a couple will typically make those decisions prior to the court issuing a formal order of distribution.

Step 2

Review the terms of the 401(k) plan or Summary Plan Description to determine how to contact the plan administrator, if you don't already have that information. The plan or SPD will include instructions explaining how to request information related to a qualified domestic relations order -- the name under federal law for the document required to divide retirement benefits, such as a 401(k) plan.

Step 3

Determine the applicable dates for determining the value of the community property portion of the 401(k) plan. If any of the 401(k) was earned prior to the date of the marriage and after the date of separation, that portion of the 401(k) is not community property and belongs only to the spouse who earned it.

Step 4

Request the value of the account as measured by the period of community property, i.e. from the date of the marriage until the date of separation, unless some other period has been decided by agreement between the parties. This often occurs when there has been a sharp increase or decrease in the account value since the date of separation.

Step 5

Complete forms FL-180 and FL-348, entitled "Judgment" and "Pension Benefits – Attachment to Judgment," which will require you to list the dates of your marriage and separation and the contact information for the plan.

Step 6

Deliver the executed forms to the plan administrator, either in person or through the mail. You will need to provide proof of service to the court.

Step 7

Determine whether there are any local forms that must be executed. The local forms would be any required by the court in which your divorce is being heard.

Step 8

Follow up, if necessary, if you have not received any information from the plan administrator within a reasonable time period.

Step 9

Proceed with the court hearing to dissolve the marriage and distribute the marital property until the court issues a final order.