Many Alaska married couples sign prenuptial agreements before their wedding day. Unless a pair of spouses has such a contract in place, funds either of them may have contributed to a 401(k) program during marriage are likely subject to division during property division proceedings. In such cases, a concerned spouse will want to make it a priority to learn more about 401(k) protection in a divorce.
Alaska is unique regarding property division laws. It operates under equitable property guidelines. However, spouses have the option to divide marital property in a divorce under community property guidelines if they prefer to do so.
Fair does not necessarily mean equal
Under equitable property guidelines, the judge overseeing your divorce will determine a fair division of marital property, which does not necessarily mean a 50/50 split. If one spouse has a retirement account worth a similar amount to the other’s 401(k), it might be possible for spouses to simply retain the assets in their individual accounts, instead of sharing. Also, in some circumstances, a spouse may be able to obtain a Qualified Domestic Relations Order (QDRO) in order to cash out on a 401(k) without penalty for early withdrawal; many people do this when they need funds for a downpayment on a new home or other divorce-related financial needs.
Achieving a fair settlement is the primary goal
The main goal of property division proceedings in an Alaska divorce is to split assets and liabilities in a way that is fair to both parties. Some cases can be complex, such as those involving a business or children or other problems, such as a suspected hidden asset scheme. In any case, it is helpful to seek legal support in order to protect one’s assets and to make sure that an equitable division of marital property takes place.