There’s a great article in the Chicago Tribune that answers basic questions about splitting retirement accounts between divorcing couples as part of property division.
The piece, “Court Order Needed to Split Retirement Accounts in Divorce,” explains that a retirement account can be divided on a tax-free basis if the account is divided pursuant to a court order.
This applies not only to a 401(k) account, but to an individual retirement account, or IRA, as well. However, you need to be aware that an IRA is subject to Section 408 of the Internal Revenue Code and not Section 401 of the Internal Revenue Code.
If you have any questions about this, it’s a good idea to talk to your lawyer or tax accountant.
Posted in: Divorce