Legal Question in Family Law in Oregon

Division of 401k: Are there options when division is not made?

My divorce was finalized June 18, 2003. One of the stipulations was that I be awarded a portion of my ex-husband's 401k Plan.

Before the divorce, my ex-husband took out a loan against the 401k Plan and purchased a car, some computer equipment, and other items. After the division, his portion was debt and the items he'd purchased, and mine was almost the full balance not borrowed against.

My ex-husband has an attorney. I don't, and I didn't during negotiations.

I was told by my ex-husband's attorney that division may take as long as 6 months due to the transfer of ownership of his employer.

Now, after several inquiries to same attorney, and several answers that tell me I must wait a few more months, I'm still awaiting the division of the 401k Plan.

My questions are as follows:

1. Is there a legal procedure or process I can initiate to have the division completed?

2. Are there options to collect the portion due me, i.e., lien on ex-husband's car, attach his wages, etc.?

3. I understand there will be a 10% penalty, but could I withdraw my portion of the Plan now?

4. Are there options available to me that I'm not aware of?

Asked on 11/09/04, 1:05 pm

1 Answer from Attorneys

Lawrence D. Gorin, Atty. Law Offices of Lawrence Gorin
0 users found helpful
0 attorneys agreed

Re: Division of 401k: Are there options when division is not made?

YOUR QUESTION:

1. Is there a legal procedure or process I can initiate to have the division completed?

------> ANSWER: YES. What you need is a “QDRO” (pronounced “quad-drow”) ---- a “Qualified Domestic Relations Order.” This is a court order, usually by a lawyer of your choosing (and NOT your ex-husband’s lawyer) and submitted to the court for judicial approval. After judicial approval, a certified copy is then submitted to the 401(k) plan, which then has 180 days to determine if the court order “qualifies” with the specifications of applicable federal law. If it does, the Plan will then become legally obligated to carry out the terms of the court.

The QDRO is for your benefit and not for your ex-husband’s benefit. It is therefore your responsibility (and not ex-husband’s) to see that it gets done, and done properly. DO NOT RELY ON YOUR EX-HUSBAND’S ATTORNEY! He/she does not represent you and has no obligation to protect your interests. A QDRO can be “slanted” so to be favorable to one party and less favorable to the other. Your ex-husband’s attorney is not looking out for you. You need to hire you own attorney to get the job done. (Attorney fees for preparation and processing of a QDRO for a 401(k) plan will generally range somewhere between $300 to $600.)

YOUR QUESTION:

2. Are there options to collect the portion due me, i.e., lien on ex-husband's car, attach his wages, etc.?

------> ANSWER: Maybe. Much depends on the wording of your divorce decree. Did the court intend to award you 50% of the 401(k) as it existed before the loans? If so, was it known that the actual account balance available to pay to you was less than the total amount court’s award? Again, you need to have a lawyer take a look at the paperwork.

YOUR QUESTION:

3. I understand there will be a 10% penalty, but could I withdraw my portion of the

Plan now?

------> ANSWER: Even though you are under age 59½, the 10% penalty does NOT apply IF the money is distributed) from ex-husband’s 401(k) plan to you pursuant to a QDRO and the distribution is paid out DIRECTLY TO YOU (and is not transferred from the 401(k) to your IRA). See 26 USC § 72(t)(2)(C).

YOUR QUESTION:

4. Are there options available to me that I'm not aware of?*

------> ANSWER: Yes, maybe. But to competently answer your question, one would have to examine the Plan’s Summary Plan Description, the Plan’s written Procedures for Qualifying Domestic Relations Order, review your divorce decree, and be familiar with applicable state and federal law.

LAWRENCE D. GORIN

http://www.divorcesource.com/OR/pages/ldgorin.html


Phone: 503-224-8884 (afternoons, Pacific time)

Read more
11/10/04, 6:51 pm

Related Questions & Answers

More Family Law, Divorce, Child Custody and Adoption questions and answers in Oregon

Looking for something else?

Get Free Legal Advice

88273 active attorneys ready to answer your legal questions today.

Family Law, Divorce, Child Custody and Adoption Legal Forms

Browse and download our attorney-prepared and up-to-date legal forms from $4.99

Find a Legal Form

Featured Attorneys

Anthony RoachLaw Office of Anthony A. RoachChatsworth, CA
Timothy McCormickLibris Solutions - Dispute Resolution ServicesSan Francisco, CA
Michael E. HendricksonAttorney & Counsellor at LawAlexandria,
Find An Attorney

Are you an Attorney?

Earn additional revenue and grow your business. Join LawGuru Now