What Happens to Your 401(k) and Retirement Accounts in a Divorce?

Retirement Accounts as Marital Property

Under Missouri law, retirement account balances earned during the marriage are generally considered marital property, even if the account is in only one spouse’s name. Contributions made before the marriage may be regarded as separate property, depending on the circumstances.

Common retirement accounts addressed in divorce:

• 401(k) and 403(b) plans
• Traditional and Roth IRAs
• Pensions
• Military or government retirement benefits

Only the marital portion is subject to division during divorce.

Equitable Distribution in Missouri

Missouri is an equitable distribution state, meaning marital assets are divided in a way the court considers fair, not necessarily equal. When determining how to divide property, the court evaluates:

• The length of the marriage
• Each spouse’s income and earning capacity
• Contributions made by each spouse during the marriage
• The economic circumstances of each spouse post-divorce
• Any existing separate property

Retirement accounts may be divided directly or balanced with other marital assets of comparable value.

Legal Tools for Dividing Retirement Accounts

For certain retirement accounts, such as 401(k)s or pensions, a Qualified Domestic Relations Order (QDRO) is required. This legal document directs the retirement plan administrator to transfer a designated portion of the account to the non-employee spouse in accordance with the divorce judgment.

Important considerations:

• QDROs must comply with both Missouri family law and federal retirement plan regulations.
• They must be approved by both the court and the plan administrator.
• A properly executed QDRO helps avoid early withdrawal penalties and delays.

IRAs, on the other hand, can typically be divided through a transfer under the divorce decree, without the need for a QDRO. However, these must be done correctly to avoid unintended tax consequences.

Note: The Betz Law Firm does not provide financial or tax advice. We guide clients through the legal process of dividing marital property, including retirement accounts. Please consult a financial or tax professional for personal investment decisions.

Common Division Scenarios

Every case is different, but some common outcomes include:

• Dividing the marital portion of a retirement account between both spouses
• Awarding one spouse full ownership of a retirement account in exchange for other marital assets
• Retaining individual retirement accounts if they qualify as separate property

Legal Representation Matters

Dividing retirement accounts in divorce involves both legal procedures and long-term financial implications. At The Betz Law Firm, we help clients understand their rights under Missouri law and ensure all necessary steps—such as court orders and QDROs—are completed accurately.