Divorce is never easy. And mixing emotions with money can make it even harder. So, seeking the consultation of a financial planner can be very helpful during this stressful time.

What are some things you may want to consider?

Do you live in a community property state or a common law state? Under community property laws, property acquired during marriage is to be split evenly. Under common law, various states apply various factors in determining equitable distributions, such as: length of marriage, education levels of each party, career earning potential, size of the accounts, etc.
Craft your Qualified Domestic Relations Order (QDRO) carefully (with your 401k plan description in mind) - your Judge will sign off on this and your plan administrator will execute it in accordance with the Employee Retirement Income Security Act (ERISA).
Remove funds only after your plan administrator has signed off on the QDRO - no penalties or taxes should be incurred at this point, as distributions of property under a properly executed QDRO are typically not seen as taxable events.
How to take your distribution? Preferably as a direct IRA rollover or TSP rollover (if you were a federal employee), as a cash out (if the QDRO permits), or wait until your ex (the account owner) retirees. Needless to say, a cash out should be your last option.

Distributions from a tax-deferred vehicle, e.g., a 401k or a SEP IRA, pursuant to a QDRO can be very complicated and one should seek legal, tax, and financial advice before embarking on this endeavor. If you have a question about distribution of assets during a divorce proceeding please feel free to contact Intelligent Investing at www.mynmfp.com/new-clients. For more information about this topic, please click on the title above.