It is true that divorce proceedings in Bowie can often get complicated, but there are times when that might be necessary. For as much as you do not want to drag out your divorce proceedings, you also want to ensure that whatever assets are shared between you are indeed divided fairly and equitably. One of these is your 401k. Depending on how long you have worked, this could be one of your most valuable assets. Many in your same position have come to us here at Reinstein, Glackin & Herriott asking for advice on how to best split this asset. Unfortunately, there may not be an easy answer to that question.
The easiest course of action may be to obtain a Qualified Domestic Relations Order that gives permission to your plan administrator to pay out funds to an alternate recipient (your ex-spouse, in this case). He or she then would likely have to roll those funds over into another 401k or IRA account. This method may offer the fewest financial hurdles, yet it does not give your ex-spouse instant access to his or her money.
If he or she is insisting upon that, you could choose to make an early withdrawal from the account. Depending on your age, however, there could be a significant tax penalty that accompanies this (as much as 30 percent), so if it is insisted upon, make sure to have your ex-spouse agree (in writing) to assume said penalty.
The 401k Help Center offers simpler and potentially less contentious solution: agree to forgo your claim over another marital assets and ask to keep the full value if the 401k. This may be the most beneficial decision for both sides.
More information on managing assets during property division can be found here on our site.