Like many other states, West Virginia is an equitable distribution state when it comes to divorce. That means the court will not necessarily split marital assets 50/50 but will work for a distribution of property that is equitable to both parties. Most divorcing couples have at least one spouse with a 401k retirement plan. The following details ways to protect one’s plan through the divorce process.
How 401ks are split
Barring a prenuptial agreement that specifies otherwise, most 401k accounts are considered marital property and are thus subject to division in divorce. Many times, the court will split the funds right down the middle. However, if both spouses have 401ks worth similar amounts, the court may allow spouses to choose to keep their respective accounts for themselves.
When couples can work collaboratively or with a mediator to come up with an agreement on their own, the court will usually honor the spouses’ wishes and award other assets to make for a fairer distribution of marital assets. However, if only one spouse has a 401k, the other will be entitled to half the funds. Also, divorce is one of the few times people can withdraw from their 401k without tax penalties. Spouses can obtain early withdrawals by using a Qualified Domestic Relations Order to pay for things such as a down payment on a new house or other necessary items.
Understanding one’s options
Even if two spouses are willing to work together regarding asset division and retirement account distribution, the divorce process itself is normally complicated with a lot of moving parts. As such, spouses will do well to work with a qualified family law attorney from the onset to ensure their rights are protected and they obtain their fair share of marital assets. Working together with the other spouse, as well as legal and financial professionals throughout the process, can help ensure a spouse gets all he or she needs to embark upon a new chapter in his or her life.
