401(k) non-vested contribution

Posted by: AZquestion

401(k) non-vested contribution - 06/19/17 03:03 PM

I would appreciate any insight on how the non-vested part of my 401(k) will be split.

I contributed $6k to my 401(k) which is split 50/50. My work contributed $12k. I am not fully vested in that contribution. I will not be vested for another 14 months. How is that handled?

Thank you in advance.
Posted by: TJMH

Re: 401(k) non-vested contribution - 06/19/17 10:10 PM

Assuming that the contribution took place during the marriage, the non-vested portion is still probably considered marital property and subject to division. Contributions by you or your employer either before the marriage or after the date of separation are probably your separate property.

One way to handle it would be to offset the value of the non-vested portion with other assets--so you keep the whole 401(k) and give your ex some other property of equal value (but keep in mind that the 401(k) money will be subject to tax in the future).

Another way would be to write up a QDRO that divides the account and instructs the plan administrator to pay the appropriate share to your ex when it becomes eligible for distribution.

You'll probably want some help from a lawyer and a financial/QDRO expert to get it all correct.