Are 401Ks Protected In A Florida Divorce Like They Are In A Bankruptcy?

No, 401ks and other types of retirement accounts are not protected in a divorce like they are in a bankruptcy. Although creditors may not be able to seize them to pay for your debts, former spouses can be awarded them. Retirement plans are marital assets that are treated in the same way as a home or bank accounts.

However, because they are retirement accounts that fall under the Employee Retirement Income Security Act (ERISA), they cannot be divided in the same way as other assets. Certain steps must be followed in order to divide a retirement account. The divorce decree must specifically order the division. Another legal document, called a qualified domestic relations order (QDRO) must also be signed by a judge. The QDRO will tell the administrator of the 401k plan how to divide the 401k and comply with both the terms of the divorce decree and ERISA.

If you or your spouse have a 401k plan that should be divided as part of the divorce, it’s important to select an attorney with experience in handling 401k plans. You should also work with a financial planner - you will have options for what to do with your portion of the 401k plan after it is split, and picking the right one is critical.


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