The division of assets is an important part of any divorce, but when those assets involve high-value financial holdings, such as 401(k)s, it’s important for couples to understand their options before deciding how to divide the assets. The most obvious way to handle a 401(k) is to just split it down the middle, but this isn’t necessarily the best option.
When deciding how to divide your assets, it’s important to look at the bigger picture. Equitable division of the assets is different than splitting everything 50/50. It’s possible for you or your spouse to keep your 401(k) in its entirety and give up some other asset, such as an individual retirement account or funds in a personal bank account, to make up the share of the 401(k).
In other situations, it may actually be beneficial to withdrawal from the 401(k). If the withdrawal is part of the divorce decree, you may be able to withdrawal the money without having to incur the usual tax penalties. However, there are certain filings that need to be done to take advantage of this option, which is where a divorce attorney can help.
Divorce attorneys deal with asset division and dispute over who gets what on a regular basis and are well equipped to help you navigate these issues during your divorce. A divorce attorney can help you understand the different options and their pros and cons. Once a divorce is finalized, there is no going back and changing how the assets were divided, so it’s crucial to seek counsel as soon as you believe you are headed for divorce.
