Splitting Retirement Benefits: Your Guide to QDROs for the Borroughs 401(k) Retirement Plan and Trust

Understanding QDROs and the Borroughs 401(k) Retirement Plan and Trust

Dividing retirement assets in divorce isn’t as simple as splitting a savings account. When a 401(k) plan like the Borroughs 401(k) Retirement Plan and Trust is involved, a special court order is required—called a Qualified Domestic Relations Order (QDRO). If you or your spouse have an account under this plan through Borroughs, LLC, here’s what you need to know about how QDROs work and how to preserve your share of this valuable retirement benefit without costly mistakes.

What is a QDRO?

A QDRO is a court order that gives a spouse, ex-spouse, child, or other dependent (known legally as the “alternate payee”) the legal right to receive all or part of the retirement benefits from a qualified plan like a 401(k) during divorce or legal separation. Without it, most retirement plans—including the Borroughs 401(k) Retirement Plan and Trust —won’t distribute any funds to a non-participant spouse, even if the divorce judgment awards them those assets.

Plan-Specific Details for the Borroughs 401(k) Retirement Plan and Trust

Before preparing a QDRO for this plan, it’s crucial to understand the specific details:

Plan Name: Borroughs 401(k) Retirement Plan and Trust
Sponsor: Borroughs, LLC
Address: 3002 N Burdick St
Industry: General Business
Organization Type: Business Entity
Plan Year: Unknown to Unknown
Effective Date: Unknown
Status: Active
EIN: Unknown (required for QDRO submission)
Plan Number: Unknown (required for QDRO submission)

When preparing a QDRO for this plan, we will need to obtain the plan number and sponsor EIN, which are required fields on most plan administrator forms. AtPeacockQDROs, we confirm all required data and contact the plan to cross-check what’s needed before we file the QDRO in court.

Dividing a 401(k): Issues Unique to the Borroughs 401(k) Retirement Plan and Trust

As a 401(k) plan, the Borroughs 401(k) Retirement Plan and Trust has several components that may affect how you divide it during divorce:

Employee Contributions vs. Employer Contributions

The participant’s personal contributions to the plan are always marital property to the extent they were earned during the marriage. However, employer contributions may be subject to a vesting schedule. That means some of the employer-matched funds may not be available to split if the participant hasn’t worked at Borroughs, LLC long enough.

In your QDRO, we’ll specify that only vested amounts are subject to division unless otherwise agreed by the parties. If you want to include future vesting, that needs to be clearly stated.

Vesting and Forfeiture

Plans often have a vesting schedule attached to employer contributions. If a participant spouse leaves the company early, part of the employer contributions may be forfeited entirely. This is why it’s essential to understand what’s fully vested before dividing the account.

Our legal team will identify whether employer contributions are fully vested and include protective language in the QDRO if needed. A poorly written QDRO could grant the alternate payee a share of funds that are later forfeited, effectively receiving nothing.

Loan Balances

If the participant took out a loan from their 401(k), the balance of that loan typically reduces the accessible account value. That loan is usually repaid through payroll deductions post-divorce, meaning it’s paid back by the employee spouse alone—not split between both parties.

In some scenarios, the QDRO can be structured to divide only the net balance, excluding the loan. Other times, we exclude the loan from division altogether. This must be clearly stated in the QDRO to avoid confusion or legal battles later.

Roth vs. Traditional Accounts

The Borroughs 401(k) Retirement Plan and Trust may include both Traditional (pre-tax) and Roth (post-tax) sub-accounts. These are treated differently by the IRS, and they should not be lumped together in a QDRO without clarification.

It’s important to divide each account type separately in a QDRO. Traditional 401(k) funds will be taxed upon distribution by the alternate payee, while Roth funds may come out tax-free if certain conditions are met. We ensure this distinction is included in your order.

How We Handle QDROs at PeacockQDROs

At PeacockQDROs, we’ve completed many QDROs from start to finish. That means we don’t just draft the order and leave you to figure out the rest. We handle the drafting, preapproval (if applicable), court filing, submission, and follow-up with the plan administrator. That’s what sets us apart from firms that only prepare the document and hand it off to you.

We maintain near-perfect reviews and pride ourselves on a track record of doing things the right way. If you’re worried about splitting a retirement account correctly, you’re in safe hands.

Here are a few additional resources to help you avoid common pitfalls when dividing retirement plans like this one:

Information You’ll Need to Provide

To begin dividing the Borroughs 401(k) Retirement Plan and Trust, we’ll need the following:

Names and addresses for both parties
Copy of the divorce judgment (or marital settlement agreement)
Dates of marriage and separation
Account statements from the 401(k) near the date of separation or division
Information about any loans against the account
Whether Traditional and Roth balances are present

Next Steps

If you’re dividing a 401(k) plan like the Borroughs 401(k) Retirement Plan and Trust, make sure your QDRO is precise, clear, and enforceable. Getting it wrong can mean delays, forfeited benefits, or a failed order that the plan administrator won’t honor. That’s why it pays to work with professionals who actually complete the process from beginning to end.

Our Service States

If your divorce was in California, New York, New Jersey, Connecticut, Kansas, Missouri, Iowa, or North Dakota, and you have questions about qualified domestic relations orders or dividing retirement assets like the Borroughs 401(k) Retirement Plan and Trust, contact PeacockQDROs. We focus on QDROs and have successfully processed many orders from start to finish.

Get the answers you need—explore ourQDRO resources orreach out for personalized help if you’re in one of our service states.

Your Attorney

William “Willie” Peacock, Esq.

QDRO & Retirement Division Attorney

Willie has handled hundreds of QDROs, been named as a stipulated or court-appointed expert in hundreds of orders, testified as an expert witness on QDROs and state government pension survivor benefits, and taught CLEs on QDROs, legal ethics, and military pensions. He is a three-time ABA award-winning legal author and secured a victory before the North Dakota Supreme Court. Full bio →

Licensed: CA · NY · NJ · CT · MO · KS · IA · ND

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