Dividing marital assets is unavoidable in any North Carolina divorce. That being said, you can and should take steps to protect the assets you value most, which could include your 401(k).
Depending on your age and employment background, you may have a 401(k) to which you have been contributing for years. These retirement plans have the potential to be quite sizable and they are often eligible for distribution in a divorce. Below, we examine a couple possibilities of what can happen to your 401(k) in the property division process.
You could keep it
In some cases, you can keep your entire 401(k). However, in order to do so you should be prepared to give up other assets. For instance, as discussed in this article, you might agree to give your ex the marital house or other sizable assets in exchange for keeping your retirement account.
Another option that could allow you to keep your entire 401(k) is to have in place a prenuptial or postnuptial agreement that designates these contributions as separate property.
You divide it with your ex
In cases where you cannot or do not want to retain your entire 401(k), understand that the benefits accumulated during your marriage are likely eligible for division between you and your spouse.
The distribution should be fair and reflect the equitable distribution laws in North Carolina. Once you agree to (or the courts order) division of your 401(k), you will need a Qualified Domestic Relations Order that names your ex as an alternate payee, and then your ex will decide how to handle his or her portion of the account.
Making decisions about retirement accounts and all assets
Assessing how you want to divide specific assets like a 401(k), or understanding how a court might divide them, can be very complicated and personal. There are numerous things to consider, from the type of asset involved to your own financial goals post-divorce.
Discussing with your attorney the options available, as well as how you can protect the assets most valuable to you, can help you prioritize, negotiate and plan for a future and settlement with which you can be satisfied.