How to Split Up the 401(k) Plan Assets in a North Carolina Divorce?

Board Certified Family Law Specialist Matt Arnold answers the question: “How will the judge divide our property?”


No one ever thinks that their marriage is going to end someday, which is why the vast majority of us are never prepared for it when it does happen. Going through the divorce process can be an emotional undertaking. After all, you are divorcing the person you have lived with for the past years or decades who may also be the mother/father of your children.

401k-illustration-Charlotte-Monroe-Lake-Norman-Equitable-Distribution-attorney-300x300Besides the emotional aspect, a divorce also raises a multitude of legal and financial issues that you will have to solve with the help of a Charlotte divorce attorney.

One of the issues is how your 401(k) plan assets will be divided between the parties during your divorce. Determining spousal support and agreeing on child custody is enough to cause friction and disputes between divorcing spouses, so the mere idea of splitting retirement assets can feel too overwhelming.

However, you can not ignore your 401(k) plans during property distribution in a North Carolina divorce. After all, the nest egg often represents a couple’s largest pot of money.


How Does North Carolina Law Treat 401(k) Plans During Divorce?

For those of you not familiar with the term “401(k),” it is a qualified retirement plan that allows certain eligible employees to save and invest for their own retirement before taxes are taken out.

North Carolina law considers any retirement plans, including 401(k), acquired during the marriage as marital property. In other words, retirement plans that are joint property are subject to equitable division as all other types of marital property.

Thus, property division in your divorce should address retirement accounts, too, regardless of whether you, your departing spouse or both have a 401(k) or other retirement plans. It may be difficult to accept that your spouse shares an equal interest in your retirement plans, but the law is the law.

However, do keep in mind that retirement plans are split up in a divorce only when these accounts were earned during a marriage.


How are the 401(k) Plans Split Up in a Divorce?

If the working spouse earns his or her 401(k) benefits entirely during the marriage, dividing your retirement plan will not be that difficult. That is because the entire amount will be subject to a 50/50 split, just like all other types of marital property.

However, in many cases, retirement accounts are divided fairly at the discretion of the court if the 50/50 split is not appropriate. Things get more complicated if the working spouse began earning the 401(k) before the marriage.

Typically, North Carolina family law allows parties to keep the separate property that was rightfully theirs before the marriage. But when your separate property becomes commingled with marital property, it can be challenging to draw a line between the marital and separate parts of your retirement plan.

In these cases, the division can be unpredictable, which is why you should be represented by a Charlotte divorce attorney to make sure that your 401(k) plan assets are divided fairly. Contact our family lawyers from Arnold & Smith, PLLC, to discuss how your retirement accounts will be split in a divorce. Call at 704-370-2828 for a phone consultation. If you find yourself facing a complicated family law matter and need the help of experienced family-law attorneys, speak with our detail-oriented and well-versed lawyers in or around Charlotte, Lake Norman, or at our new office in Monroe, please contact Arnold & Smith, PLLC today at (704) 370-2828 or find additional resources here.







The family law practice group at Arnold & Smith, PLLC includes two Board-Certified Family Law specialists and one Child Welfare Law specialist, as well as several attorneys with many years of family law experience that are committed to providing a powerful voice to individuals facing the often-tumultuous issues in this area of law. The range of issues our family law clients may be facing include pre- and post-nuptial agreements; separation agreements; post-separation support; child support (both temporary and permanent); absolute divorce; divorce from bed and board; military divorce; equitable distribution of assets; child custody (both temporary and permanent); retirement benefits and divorce; alimony and spousal support; adoption; and emancipation. Because this area of the law is usually emotionally charged and complicated, the family law attorneys at Arnold & Smith, PLLC act with the utmost dedication to ensure that each client understands his or her options, and then act to achieve the best result possible for that client’s particular situation.





Image Credit:



See Our Related Video from our YouTube channel:



See Our Related Blog Posts:

Divorce and the impact on your Thrift Savings Plan (TSP)

How are Marital Debts (and Student Loans) Split in North Carolina Divorce?

Contact Information