To make a withdrawal from a 401(k) account, you must typically be the account's owner. Even if your spouse is a beneficiary of the account, she can't make withdrawals without your permission. However, if you and your spouse divorce, she may be able to obtain funds from the account using a court order.
The term "marital property" refers to any asset that both spouses own. If you opened your 401(k) after you and your spouse were married, the contents of the account qualify as marital property, and both you and your spouse have rights to them. Even if you opened your account before the marriage, any portion of the funds that accumulated after you and your spouse got married will still qualify as marital property in the eyes of the law.
Even if your 401(k) qualifies as marital property, your spouse does not have equal rights to the account while you are married. Although your plan may allow you to make a withdrawal without your spouse's knowledge, she cannot make any withdrawals or take loans from the account without your written consent. Furthermore, if any portion of the plan is marital property, some plan sponsors won't even allow you to take money out of the account without first consulting your spouse.
If you and your spouse divorce and your 401(k) is marital property, most states will award your spouse a portion of the account. In such cases, the court will order the plan administrator to distribute your spouse's portion of the account directly to her, or it will award her a comparable marital asset and allow you to keep your 401(k) intact. If the court elects to force a distribution from the account, it will issue a Qualified Domestic Relations Order, a court order that allows the distribution to occur without incurring early withdrawal penalties.
In some cases, a former spouse can claim funds from your 401(k). If you fail to pay court-ordered spousal maintenance or child support and your spouse obtains a judgment against you, the court may issue a QDRO that requires your plan administrator to distribute the money you owe directly from your 401(k).
- U.S. Department of Labor: Qualified Domestic Relations Orders
- The Wall Street Journal: Splitting Up Nest Eggs
- Bench & Bar of Minnesota: Collecting Child Support & Maintenance -- A New Role for QDROs
- Electrical Industry Board of Nassau & Suffolk Counties: Commonly Asked Questions of the 401(k) Fund
- Huffington Post: Can I Take Money Out Of My 401K During My Divorce?