Divorce and the Kehoe Designs 401(k) Plan: Understanding Your QDRO Options

In most 401(k) plans, there are two primary sources of funds: employee contributions (what the participant put in through payroll deduction) and employer contributions (matching funds or other employer deposits). A QDRO can divide both, but it’s essential to spell out whether both types are to be included.

Employer contributions may be subject to vesting. For example, if your spouse has only worked at Kehoe designs, Inc.. for a few years, part of the employer match may not be vested. The QDRO should specify that only vested employer contributions as of the date of division are to be transferred to the alternate payee (that’s the spouse receiving the benefit).

Vesting schedules matter. If your QDRO improperly assumes the entire employer match will be divided, and some of it isn’t vested, you could end up with less than expected. To avoid this, we always check if the plan has a graded or cliff vesting schedule and make sure the QDRO includes precise language about division of vested-only amounts.

If the participant took a loan from the Kehoe Designs 401(k) Plan, it can affect how much you receive through a QDRO. The law allows plan loans, and they’re treated as a liability. If your portion of the QDRO is 50% of the account and there’s a loan, your share will likely be 50% of the account minus 50% of the loan balance—unless your QDRO says otherwise.

You can choose to treat the loan as the participant’s separate obligation, so it doesn’t reduce your share. Or you can accept a 50/50 split, net of the loan. But the QDRO must make that decision clear.

The Kehoe Designs 401(k) Plan may include both traditional (pre-tax) and Roth (after-tax) account balances. These are taxed differently on distribution. Your QDRO needs to specify how to divide each type of account. Transferring your share into a single type of account without regard to tax treatment can create problems down the road.

When we prepare a QDRO at PeacockQDROs, we make sure the split mirrors the tax structure of the original account. Roth stays Roth; pre-tax stays pre-tax. That avoids surprise tax bills later.

You (or your attorney) will need to collect:

• Full plan name: Kehoe Designs 401(k) Plan
• Plan sponsor: Kehoe designs, Inc..
• Plan number and EIN (can be obtained from plan administrator or sponsor HR)
• Current statement showing account values, loan balances, and vested amounts

This is where precision matters. The order has to conform not only to federal QDRO rules, but also to Kehoe Designs 401(k) Plan’s own administrative procedures. Errors here can cause rejection.

That’s why people come to us at PeacockQDROs. We’ve done this process thousands of times and know how to draft it correctly the first time.

Some plans (but not all) will review a draft of the QDRO before court filing. This process helps catch issues early before getting a judge’s signature. If Kehoe Designs 401(k) Plan offers preapproval review, we submit the draft for you and work directly with the plan administrator to get feedback.

Once preapproved (if applicable), the QDRO is signed and entered by the court. That makes it legally binding.

We send the signed court order to the plan for processing. The plan then sets up a separate interest or processes the lump-sum transfer, depending on how the QDRO is written.

Plans can take weeks or even months to finalize the transfer. We stay involved to ensure deadline monitoring and proper implementation — a step many “QDRO-only” document services skip entirely.