How Do I Protect My 401(k) In a Divorce?

How Do I Protect My 401(k) In a Divorce?

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How Do I Protect My 401(k) In a Divorce?

When you get a divorce, your property is going to get split up. This is just how the process works. One thing that many of our clients wonder about is their retirement and 401(k) accounts. Could your spouse end up receiving money from those accounts? They could, but our Chatham property distribution attorneys may be able to help you protect these funds.

Is My 401(k) Considered Marital Property or Separate Property?

Whatever money you earned and put in a 401(k) or similar account while you were married is considered marital property. You earned that money during your marriage, so it technically belongs to both of you. If you had an account open before you got married and you never contributed to it while you were married, then you may be able to argue that the assets inside of it are yours and yours alone.

Will My Spouse End Up With Half of My 401(k)?

If your 401(k) is considered marital property, your spouse could end up getting half of it. It’s important to note that the money you put in your account before you got married is yours though.

So let’s say that your account is currently worth $100,000. It had $20,000 in it before you got married and you put $80,000 in during the course of your marriage. Your spouse would not get $50,000. They would get $40,000, half of what you put in while you were married. You can convincingly argue that the other $20,000 was separate property.

Can I Hide My Retirement Accounts?

You can try to, but you will probably get caught and it is illegal. When you get a divorce, both spouses need to be completely honest about their financial assets. If you lie, you could get charged with perjury and your 401(k) account will get split up anyway. It’s just not worth it.

How Can I Protect These Accounts?

There are some ways to protect your 401(k) though. You can:

Sign a prenup: A prenuptial agreement could be your best option here. An agreement that makes it clear who keeps which assets during a divorce can protect your 401(k) and other retirement accounts from the property division process.

Offer something else to your spouse: You can offer different property to your spouse during the negotiation process. Because your 401(k) should keep growing, sacrificing something else could work out for you better in the long term.

Agree to keep your own retirement accounts: If you and your spouse have similar amounts in your retirement accounts, it’s probably just easier to have both parties keep what they have and focus negotiations on the other marital assets.

Talk to a Lawyer Today

If you want to do everything that you can to protect your assets in a divorce, you should hire an experienced attorney. Contact Lazor Rantas, PC and ask to schedule a consultation with our team. We can tell you more about how we can help you protect the money in your 401(k) and other accounts.

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