Nearly all financial aspects of divorce are complex, but few are quite as confusing and consequential as the 401(k) retirement plans. Unlike other assets, these accounts often lead to costly penalties when dividing them, and those who dip into them to fund the actual divorce often find themselves in even more financial trouble. Learn how to effectively divide your retirement plan in divorce, and how the assistance of an attorney can mitigate the risks.

The Complexities of QDROs

Qualified domestic relations orders, or QDROs, are used to divide retirement and pension plans in divorce. They are also exasperating and frustrating for those who do not know how to handle them. This is especially true when the QDRO is handled by a third party. Additional fees can be added when things do not go smoothly (such as failing to follow a third party’s outlined instructions)—sometimes two to three times more than what the divorcing parties might have otherwise paid.