Participant Loans
If the participant has taken a loan against their 401(k), that loan balance can’t be shifted to the alternate payee. However, you must still decide how to handle the loan in the QDRO. There are two common options:
- Include loan in account balance: The alternate payee’s share is based on the full balance, including the loan.
- Exclude loan from division: The alternate payee receives a share of the actual available funds only.
Your QDRO should clearly reflect which method is being used.

