As you prepare for your divorce proceedings in Clinton Township, you are likely aware that you and your soon-to-be ex-spouse will need to split your marital assets between the two of you. What you may not be aware of is that many assets you (and many others) believe to be separate are, in fact, not. Chief among these is your 401(k). You may wonder why your 401(k) benefits (which are typically earned through your employer) would be considered marital property. After all, your spouse had no hand in earning them, right?
At least according to the principles governing property division, that assumption is wrong. Marital property is anything earned or accumulated while you were married. Thus, if contributions were made to your 401(k) during your marriage, they are considered marital assets. What if you had already begun contributing to your 401(k) prior to your marriage? Those funds contributed prior to the marriage (as well as any interest they have earned) are considered separate property, while contributions made during your marriage (and their specific interest) are marital property.
So now that you understand why you may have to include your 401(k) in your divorce, the question becomes how to divide it with your ex. The 401(k) Help Center offers a few suggestions. Two involve obtaining a Qualified Domestic Relations Order that stipulates which of you gets what. You can then liquidate your ex-spouse's portion and give it to him or her in one lump sum (in which case, you may be subject to early withdrawal penalties), or you can roll his or her portion into a separate 401(k) account.
You may also want to consider asking to keep the full value of your 401(k). The trade-off to that may be giving up your claim to a marital asset of equal value.