What happens to retirement funds and 401(k) plans in a divorce?
Retirement plans, 401Ks, IRAs, and Defined Benefit Plans are property that can be distributed in a divorce. If they were acquired during the marriage, or part of them were acquired during the marriage, they can be distributed pursuant to the rules of equitable distribution. There are special tricks and techniques for dividing assets that have not yet been taxed, like an IRA, a 401K, or property that has not even been received yet, like a defined pension benefit plan. The court can divide these things in a way that avoids current taxation, and each of you can have separate parts that you will receive, and you will each pay your own taxes.