Dividing the Butterworth Industries, Inc. 401(k) Plan in Divorce
Going through a divorce can be complicated enough, but when retirement assets like the Butterworth Industries, Inc. 401(k) Plan are on the table, it raises a host of additional questions. How do you divide this specific plan fairly? What happens to loans? What about unvested employer contributions or Roth balances?
The answer lies in a Qualified Domestic Relations Order—or QDRO. This type of court order allows a retirement plan like the Butterworth Industries, Inc. 401(k) Plan to pay benefits directly to a former spouse (also called the “alternate payee”) without triggering taxes or penalties to either party.
As a firm that has completed thousands of QDROs from start to finish, at PeacockQDROs, we know the ins and outs of dividing 401(k) plans—especially ones like this. Here’s what you need to know.
Plan-Specific Details for the Butterworth Industries, Inc. 401(k) Plan
Before doing anything, it’s important to gather specific details about the retirement plan in question. Here’s what we know about the Butterworth Industries, Inc. 401(k) Plan:
- Plan Name: Butterworth Industries, Inc. 401(k) Plan
- Plan Sponsor: Butterworth industries, Inc. 401k plan
- Industry: General Business
- Organization Type: Corporation
- Plan Number: Unknown (Required for the QDRO—may need to be obtained from the plan administrator)
- EIN (Employer Identification Number): Unknown (This is also required—filed with the plan or available from HR or plan administrator)
- Status: Active
- Participants, Assets, Plan Year: Unknown
To get started with the QDRO, you’ll need to gather any missing information from the plan administrator or your spouse’s HR department. Don’t leave out essential details like the plan number or EIN—both are mandatory for processing the order.
How QDROs Apply to the Butterworth Industries, Inc. 401(k) Plan
Since this retirement plan is a 401(k), the division process will typically grant the alternate payee a percentage or a fixed dollar amount of the participant’s account as of a specific date (often the date of separation or divorce). But there are some caveats, especially with 401(k)s.
Key 401(k) Plan Concerns in Divorce
- Vesting Schedules: Contributions made by the employer may not yet be fully vested. If they aren’t, they can’t be divided, and those funds may be forfeited if the participant leaves before vesting.
- Plan Loans: Does your spouse have an existing loan from their 401(k)? If so, who will be responsible? Or will that balance reduce the marital portion?
- Roth vs. Traditional Accounts: Roth 401(k)s have different tax implications than traditional 401(k)s. A good QDRO needs to separate the balances accordingly.
Your QDRO should clearly spell out how those situations will be handled—otherwise, you’re asking for delays and possibly future disputes.
Common Mistakes When Dividing a 401(k) Like This One
Having worked with thousands of families through PeacockQDROs, we see recurring errors—some of which can cost you thousands or add months to the process. Here are the biggest mistakes people make when drafting a QDRO for the Butterworth Industries, Inc. 401(k) Plan:
- Failing to address loan balances—should they be excluded from division or considered a marital debt?
- Not accounting for Roth and traditional sources in different subaccounts.
- Trying to divide unvested employer contributions without checking the vesting status.
- Submitting a QDRO without the plan number or EIN, resulting in rejection.
We cover more of these issues here in our top QDRO mistakes article.
Drafting an Effective QDRO for the Butterworth Industries, Inc. 401(k) Plan
For the Butterworth Industries, Inc. 401(k) Plan, your QDRO must follow both federal ERISA rules and the plan’s internal policies. Many plans have a QDRO “pre-approval” process where they review a draft before it’s submitted to court.
PeacockQDROs’ Process
Unlike firms that just hand you a document and wish you luck, we offer complete service. At PeacockQDROs, we:
- Draft your QDRO with language specific to the Butterworth Industries, Inc. 401(k) Plan
- Submit it to the plan administrator for pre-approval, if the plan allows
- File the order with the court once approved
- Follow up to ensure the plan accepts and implements the QDRO
This step-by-step project management is exactly why we maintain near-perfect reviews and have a long-standing reputation for “doing things the right way.”
Special Considerations for Employer Contributions
The Butterworth Industries, Inc. 401(k) Plan, as part of a General Business Corporation, likely includes both employee and employer contributions. While the employee’s portion is almost always 100% vested, the employer part may be subject to a vesting schedule.
You’ll need to:
- Check the plan’s Summary Plan Description for the vesting rules.
- Clarify whether unvested employer funds will be divided or excluded from the QDRO.
- Specify in the QDRO that only vested funds are eligible, if applicable.
Don’t risk having your QDRO rejected—this language matters.
Handling Plan Loans Within the QDRO
If there’s an outstanding loan in the participant’s account, you need to decide how that impacts the division. Three common approaches are:
- Exclude the loan amount from the marital portion
- Include the loan but assign repayment responsibility to the participant
- Divide the entire balance including the loan (less common)
The best approach depends on your divorce agreement and the value of other assets. But the QDRO must match. If it doesn’t mention the loan at all, you may end up redoing the whole thing.
Roth vs. Traditional 401(k) Accounts
Some plans, including potentially the Butterworth Industries, Inc. 401(k) Plan, allow participants to contribute on both a pre-tax and Roth (after-tax) basis. These balances must be tracked and divided separately in your QDRO to avoid incorrect tax treatment when funds are distributed later.
How Long Will It Take?
Curious about the timeline? We walk through the variables that affect QDRO timing here: Five Factors That Determine QDRO Timelines.
What Documents Will You Need?
- Plan Summary or SPD for the Butterworth Industries, Inc. 401(k) Plan
- Statement showing the balance as of the agreed division date
- Loan information, if any
- The participant’s and alternate payee’s full names, addresses, and birthdates
- Plan number and EIN (required for plan administrator acceptance)
If you’re having trouble gathering these, reach out to the plan sponsor: Butterworth industries, Inc. 401k plan. Their HR department should be your first stop.
Get Help from QDRO Professionals
Dividing a 401(k) like the Butterworth Industries, Inc. 401(k) Plan is not something you want to DIY. A single error—such as mislabeling a Roth account or omitting the plan number—can delay your divorce or even reduce your settlement. At PeacockQDROs, our team deals with plans just like this every day.
We don’t just hand off a template and walk away. We help you from day one through plan approval. That means less stress and fewer costly surprises for you.
Need Help with Your QDRO?
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 Butterworth Industries, Inc. 401(k) Plan, contact PeacockQDROs. We specialize in QDROs and have successfully processed thousands of orders from start to finish.
Get the answers you need—explore our QDRO resources or reach out for personalized help if you’re in one of our service states.