Massachusetts Laws on Divorce & 401(k)s

By Mary Jane Freeman

If you and your spouse divorce, not only do you have to separate your lives, you also must separate the property you acquired together. In Massachusetts, 401(k)s and other retirement accounts are considered property. This means that your spouse may be entitled to a share of your account if you acquired it, or contributed to it, during your marriage.

Equitable Distribution

When dividing your property, including your 401(k), a Massachusetts court does so according to a legal concept known as equitable distribution. The division must be fair and reasonable, but not necessarily equal. Only marital property is divisible in divorce, that which either you or your spouse acquired during the marriage. Your separate property is not divisible. Separate property includes any asset that either you or your spouse acquired before you got married, or received by inheritance or gift while you were married.

Division and 401(k)s

After the court distinguishes marital property from your separate property, the judge proceeds with dividing it equitably. Even if your 401(k) was opened prior to your marriage, the court still can divide the portion of it that represents contributions made after you married. The court considers a number of factors when dividing this portion, such as the duration of your marriage, financial misconduct on the part of you or your spouse, and the needs and liabilities of each of you.

Divorce is never easy, but we can help. Learn More

QDROs and Payment

If the court awards your spouse a portion of your 401(k), you or your attorney must draft an order to release the funds. A specific document known as a qualified domestic relations order, or QDRO, must advise your plan administrator of your spouse's right to payment from your 401(k), and the amount she is to receive. After the plan administrator reviews the QDRO for completeness and approves it, your spouse becomes eligible for payments.

Distribution

Although QDROs establish a non-employee spouse's right to payment, the retirement plan itself determines when those payments can be disbursed. In the case of your 401(k), your spouse might begin to receive payments as soon as the plan administrator approves the QDRO. This is because 401(k) accounts permit immediate withdrawals if they're made pursuant to a QDRO. These withdrawals are not subject to an early withdraw penalty because they are made according to a family court order. Your spouse can roll her share over into a separate 401(k), an IRA, or another retirement account. She also has the option of receiving a cash payment.

Divorce is never easy, but we can help. Learn More
Pension Law for a Georgia Divorce
 

References

Related articles

Divorce Law for Pensions & Percentages in Alabama

When Alabama spouses divorce, they must divide their property — or allow the court to decide how it should be divided. Alabama courts may consider pensions and other retirement benefits to be marital property, subject to division in a divorce. However, pensions are treated a bit differently than other property since they cannot be divided unless the spouses were married for at least 10 years.

401(k) Rights in a Divorce

One of the most difficult aspects of property division in a divorce case concerns the sharing of retirement assets. Some people may feel a sense of sole ownership over their 401(k) accounts, especially if they believe their spouse did not work or save quite as much as they did. Although part of your respective 401(k) funds may in fact be your separate property, a portion will be marital and therefore subject to division.

Divorce in Alabama & Spousal Right to Half of 401(k)

Alabama is an equitable distribution state. This means that, during a contested divorce, the judge will decide whether property should be divided and, if so, how to divide it fairly. Sometimes, retirement accounts, such as a 401(k), can be included in the property division. Alabama law requires the judge to make sure certain conditions are met and follow a few rules when dividing a retirement account.

Get Divorced Online

Related articles

Divorce Retirement Questions in Michigan

If you're divorcing in Michigan, you may have questions about how your retirement plan and that of your soon to be ...

How Is a Roth IRA Divided in a Divorce?

Dividing most retirement accounts in a divorce can be a major headache, but Roth IRAs are an exception. Unlike defined ...

Texas Divorce Laws on the Distribution of Pension Income

Before a divorce decree is issued, the court must first make sure any and all marital issues have been resolved, such ...

How Does Indiana Divorce Law Divide a 401K?

When an Indiana couple divorces, the court must divide the couple’s property as part of the divorce decree, unless the ...

Browse by category
Ready to Begin? GET STARTED