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How Is a 401(k) Divided in Divorce?

Posted on in Criminal Law

waukesha divorce lawyer Divorce is stressful. Even in the best of circumstances, the process is filled with tension and drama. Simply separating from a person that you shared a life with for years can be heart-wrenching, even if it is necessary. There are also practical components that are just as challenging. The lives of spouses are intertwined not only emotionally, but financially as well. The disentangling of financial interests is frequently a source of tension during separation, especially if a 401(k) plan is present.

Who retains the benefit of a 401(k) is a deeply personal issue; after all, it is often essential to both parties’ quality of life post-retirement.

Wisconsin Law establishes how retirement plans, such as pensions and 401(k)s, are divided by the court during divorce.

Is a 401(K) Marital Property?

What percentage of the 401(k) each party gets to keep largely hinges on what portion of it is marital property.

Wisconsin is a community property state, which means all property acquired post-marriage is considered “marital property” and divided equally between the parties.

Therefore, if a 401(k) was opened during marriage, both spouses are typically entitled to 50 percent of its value. This rule applies even if only one spouse contributed to the plan.

If the 401(k) was acquired pre-marriage, the value accumulated during the marriage is considered marital property. Thus, if 40 percent of the plan’s value accumulated prior to marriage, the party that opened the plan is entitled to 70 percent of its total value – the entire pre-marriage share (40 percent) and half of the post-marriage marriage share (60 percent).

Contact a Waukesha Divorce Attorney

Divorce is never easy. When people are married, their lives become intertwined emotionally, psychologically, and financially. Untangling these ties is a trying experience psychologically and practically, even when there is no other choice.

Wolff & Sonderhouse, LLP has been offering skilled legal representation to Wisconsinites for years. If you need a Waukesha County property division lawyer that means business, contact Wolff & Sonderhouse, LLP today at 262-232-6699 for a free initial consultation.

Source: 

https://docs.legis.wisconsin.gov/statutes/statutes/767/iv/315

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