One of the most challenging things about ending your marriage is determining how to split your assets, especially when they are complicated. Dividing a checking account may be fairly simple, but figuring out who gets how much of a 401(k) is usually far trickier.

Dividing a 401(k) is difficult because it does not have a fixed value and you need a special court order to distribute funds. Here are some things to know about dividing a 401(k) if your divorce is drawing near.

You need a QDRO

Taking funds out of a 401(k) plan to finish your divorce is not a decision you can make on a whim. You need a judge to accept a Qualified Domestic Relations Order, or QDRO. This document confirms the portion of the money that each spouse will get from the retirement account. Obtaining a QDRO is helpful for the account owner because it prevents early withdrawal penalties and tax consequences.

There are several distribution options

 The receiving spouse has three main options for getting the funds:

  • Take the funds once the account owner enters retirement
  • Request a direct transfer to roll the funds over into his or her own qualified retirement plan
  • Cash out the funds immediately, which may come with a withdrawal penalty

The method you choose depends on negotiations with your spouse.

Adhere to state law or work out an agreement among yourselves

 State law dictates the division of assets. Florida is an equitable distribution state, meaning that the court will determine who deserves how much depending on a variety of factors, such as finances, future earning capacity and duration of the marriage. But you can come to your own arrangement with your spouse if you are able to see eye to eye.

Distributing a retirement plan may sound intimidating, but as long as you get a QDRO and rely on sound advice, you can accomplish it.