How Are 401k Retirement Accounts Divided In Divorce? San Diego Divorce Mediation Video Series

How Are 401k Retirement Accounts Divided In Divorce? San Diego Divorce Mediation Video Series

401k In Divorce

Attorney Mediator CDFA and Chief PeaceKeeper™ Scott Levin sit down with Laurie Itkin CDFA to discuss retirement accounts during a divorce and California. Special attention are paid to rules about setting the value of a 401k account during divorce, and when and how a 401(k) retirement account has  both separate property funds and funds that are to be shared equally in our community property state.   A similar video featuring Scott Levin and Laurie Itkin about how to divide RSUs in a California divorce is also featured on the San Diego mediation blog

Options for How a 401k Get Divided During California Divorce

One of the most challenging types of assets to divide in divorce are retirement accounts, in particular 401ks, which have several problematic features. They are almost always acquired over time, which means they may be partly marital property and part separate property. They have a different value in the present than they will when the funds are taken out in the future. How is the appreciation handled and how do you transfer them pursuant to a divorce?

It comes as a rude shock to some people to learn that “their” 401(k) or pension isn’t exclusively “theirs,” even though they earned it as part of their job. In California, as in most other states, most assets acquired during a marriage are considered community property, no matter who earned or acquired them. This means that the 401k you’ve earned from your employer during the marriage will be considered a shared community asset to be divided equally during your divorce mediation. To implement your agreement for division, San Diego QDRO attorney Scott Levin helps create a domestic relations order qdro which is the legal document instructing the financial institution as to how the 401k funds will be shared.  But if you earned a portion of that 401k prior to marriage, then not all of it will be shared. It will need to be divided while also giving you credit for the portion earned prior to your marriage. There are so many issues in play when dividing these retirement accounts and we encourage you to watch the 12-minute video to get a sense of some of these issues.

Laurie Itkin is a financial advisor, wealth manager, and certified divorce financial analyst (CDFA). She is also the author of the Amazon best-seller, Every Woman Should Know Her Options: Invest Your Way to Financial Empowerment. Investopedia named Ms. Itkin one of the top 100 most influential financial advisors in the country. Through her financial consulting company, The Options Lady, she provides divorce-related financial planning and analysis to individuals and couples throughout all stages of the divorce process. Reach Ms. Itkin at

Scott Levin is a renowned attorney-mediator and founding partner of San Diego Divorce Mediation