Going through a divorce can be overwhelming—especially when you’re trying to figure out how to divide retirement assets like a 401(k). If one or both spouses have an account under the Building Blocks Therapy 401(k), it’s critical to get it right using a Qualified Domestic Relations Order (QDRO). This legal document is required to divide retirement benefits properly and in compliance with federal law.
In this article, we’ll explain the key aspects of using a QDRO to split the Building Blocks Therapy 401(k), outline what divorcing couples should look out for, and offer strategies specific to 401(k) division. At PeacockQDROs, we’ve completed many QDROs from start to finish, including those for general business sector plans like this one. Let’s walk through what you need to know.
When preparing a QDRO for this plan, here’s the important information to identify the correct account:
You’ll need to obtain the plan number and EIN from the plan administrator or a statement before submitting your QDRO. These two identifiers are required for the administrator to process the order.
Because this is a 401(k) plan, there are some key issues to account for when preparing and filing your QDRO:
Many 401(k) plans include both employee deferrals (money taken straight from the participant’s paycheck) and employer contributions (such as matching or profit-sharing contributions). In most QDROs, both types of contributions are divided unless the parties negotiate otherwise. However, the employer contributions may be subject to vesting schedules.
Employer contributions are often not fully vested until the participant meets certain service requirements—like years of employment. If the participant leaves Building blocks therapy, LLC before becoming fully vested, some of those contributions may be forfeited. A well-drafted QDRO should clearly clarify whether the alternate payee (often the ex-spouse) is entitled only to the vested portion of an account or a specific dollar amount that accounts for potential future vesting.
If the participant has taken out a loan from their Building Blocks Therapy 401(k), it’s important to understand how that will affect the division. QDROs can be drafted to divide assets on either a “gross” or “net” basis:
Whether loans are considered the participant’s full responsibility or reduce the total divisible account is something divorcing couples should address during settlement and include in the QDRO.
The Building Blocks Therapy 401(k) may include both traditional (pre-tax) and Roth (post-tax) contributions. These accounts have different tax implications down the road, especially for the alternate payee. When dividing the 401(k), it’s essential the QDRO items are separated by source type or explicitly identified. The order should say whether the split includes just traditional, just Roth, or both. If it’s silent, the plan administrator may return it for revision.
Your QDRO can award a fixed dollar amount or a percentage of the marital portion of the Building Blocks Therapy 401(k). Common options include:
In either case, the QDRO must clearly define how the award is calculated—and whether investment gains and losses apply.
QDROs can be submitted during or after divorce proceedings, but earlier is better. If a participant retires, dies, or cashes out the account before a QDRO is in place, the alternate payee could lose their share.
To be accepted, the QDRO must follow IRS and Department of Labor requirements and meet the Building Blocks Therapy 401(k) rules. It needs to provide:
A judge must sign the QDRO, and then it’s submitted to the plan for review. Some plans offer preapproval before court filing; that’s something we recommend when available.
At PeacockQDROs, we’ve seen what happens when a QDRO is incomplete or unclear. Many companies just generate the basic document and expect you to figure out the rest. That’s not how we do it.
We handle:
We maintain near-perfect reviews and pride ourselves on a track record of doing things the right way. If you want to avoid pitfalls, take a look at our article oncommon QDRO mistakes. And if you’re wondering how long it will take, here’s a guide to the5 factors that determine QDRO timing.
The Building Blocks Therapy 401(k) is an active retirement plan administered by Building blocks therapy, LLC, a business operating in the general business industry. While we don’t yet have public record of its EIN or plan number, these can be obtained for completing and submitting a QDRO properly. When dividing complex 401(k) plans with potential loans, vesting issues, and Roth vs. traditional components, don’t leave it to guesswork.
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 Building Blocks Therapy 401(k), 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.
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 →
