If the petitioner awarded 50% of respondent 401k but petitioner has not collected any money, is there a statute of limitations on when they can collect?

UPDATED: Oct 2, 2022

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If the petitioner awarded 50% of respondent 401k but petitioner has not collected any money, is there a statute of limitations on when they can collect?

The divorce finalized 5 months ago. Now opening a Roth 403B with a new financial institution. About 2 years ago, 50k was removed from the 401k for home repairs. Also, 100% of the home and possessions awarded to petitioner. Respondent paid a tax penalty last year for 401k withdraw. If respondent rolls the 401k to a new 403b, is there a penalty with the divorce court?

Asked on September 17, 2019 under Family Law, Texas


B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If fifty percent of the 401k has been awarded to one spouse, then that 50% is their property.  That spouse needs to send a certified copy of the final decree of divorce to the HR Department AND the 401k administrator so that they know that the funds belong, in part, to each spouse.  The HR Department and Plan Administrator will then know not to release funds to the other spouse.  The funds can stay in the 401k until retirement, or they can be rolled over to a new retirement plan.  The divorce court won't care...all they will care is that each spouse only takes what they are awarded.
As a general rule, a spouse has 2 years from the date of entry of the final decree to file a motion to enforce if one spouse refuses to honor an agreement.  I always suggest that if someone is going to file an enforcement, to do so within the 2 year mark.  However, 401k plans funds can be pulled out and transferred to a new retirement plan even after the 2 year mark....because the spouse already owns those funds.  To get the funds transferred, the spouse needs to have the judge sign what is called a Qualified Domestic Relations Order.  Because this is just an "administrative" order, (rather than an enforcement order), the judge can sign it any time...2 years, 4 years...or even 8 years later.  Many plan administrators will not release or transfer funds without the Qualified Domestic Relations Order.  

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