Dividing 401(k) Accounts in Divorce: Know Your Rights
When couples divorce, dividing retirement assets can be one of the most complicated and contested issues—especially when a 401(k) is involved. If one or both spouses have money in the Lift Power, Inc.. Profit Sharing 401(k) Plan, a Qualified Domestic Relations Order (QDRO) is required to divide those funds legally and without triggering taxes or penalties.
As QDRO attorneys at PeacockQDROs, we’ve helped thousands of clients divide retirement assets, including employer-sponsored 401(k) plans like the Lift Power, Inc.. Profit Sharing 401(k) Plan. This article explains the key steps in the QDRO process, the specific considerations for this plan, and what you can do to protect your share in divorce.
What Is a QDRO and Why Do You Need One?
A QDRO is a court order that tells the plan administrator how to divide retirement assets between divorcing spouses. Without a QDRO, the plan legally cannot pay benefits to anyone other than the employee who earned them. A well-drafted QDRO ensures the former spouse gets their fair share of the retirement account in accordance with the divorce judgment—and avoids costly mistakes or delays.
Plan-Specific Details for the Lift Power, Inc.. Profit Sharing 401(k) Plan
Before drafting a QDRO, it’s important to understand the specific features of the retirement plan. Here’s what we know about the Lift Power, Inc.. Profit Sharing 401(k) Plan:
- Plan Name: Lift Power, Inc.. Profit Sharing 401(k) Plan
- Sponsor Name: Lift power, Inc.. profit sharing 401(k) plan
- Plan Type: 401(k) profit-sharing plan
- Plan Number: Unknown (must be obtained to complete a QDRO)
- EIN (Employer Identification Number): Unknown (required for QDRO processing)
- Effective Date: Unknown
- Status: Active
- Organization Type: Corporation
- Industry: General Business
- Plan Administrator Address: 20250818202700NAL0001592177001, 2024-01-01
Because specific details like plan number and EIN are essential for finalizing a QDRO, we recommend requesting the most recent plan information through either the plan administrator or a subpoena if necessary.
Key Features to Consider When Dividing the Lift Power, Inc.. Profit Sharing 401(k) Plan
1. Employee and Employer Contributions
Most 401(k) plans, including the Lift Power, Inc.. Profit Sharing 401(k) Plan, involve a combination of employee salary deferrals and employer matching or profit-sharing contributions. Not all of these funds may be considered marital property, depending on when they were contributed.
We typically recommend dividing only the “marital portion” of the account—meaning contributions made and earnings accrued during the marriage. If you’re dividing both employee and employer contributions, the QDRO should clearly identify how each portion is to be treated.
2. Vesting Schedules
Employer contributions are often subject to a vesting schedule. That means part of the employer money may be forfeited if the employee isn’t vested at the time of divorce. This is very important when evaluating what portion is actually divisible.
The QDRO should explicitly state that only the vested portion of the account is subject to division—or, if agreed, include a provision allowing the alternate payee to receive a share of any future vested interest.
3. Outstanding Loan Balances
The Lift Power, Inc.. Profit Sharing 401(k) Plan may allow the participant to take loans from their 401(k) balance. If a loan is outstanding at the time of divorce, the QDRO must address whether the loan reduces the balance that will be divided.
Here are two common approaches:
- Include the loan balance in the account total and give the alternate payee their share based on the total quoted balance, effectively placing the burden on the participant to repay it.
- Omit the loan from the division entirely, making the division based only on the net account value after the loan offset.
The choice should reflect what was agreed during the divorce and must be clearly written in the QDRO.
4. Roth vs. Traditional 401(k) Funds
This plan may contain both pre-tax (traditional) and post-tax (Roth) funds. These account types have different tax treatments, and the QDRO must specify how each is divided.
If the alternate payee receives Roth funds, they may be able to roll them into a Roth IRA. If they receive traditional funds, those will roll into a traditional IRA (or be taxed if taken as cash). Some clients want a percentage of both; others choose only one type. We ensure that the QDRO matches the intended tax outcome.
Drafting the QDRO: What You Need
To draft a proper QDRO for the Lift Power, Inc.. Profit Sharing 401(k) Plan, you’ll need several pieces of information:
- Plan name and sponsor: Use the exact title, “Lift Power, Inc.. Profit Sharing 401(k) Plan,” and sponsor “Lift power, Inc.. profit sharing 401(k) plan.”
- Plan number and EIN: Required for submission to the plan administrator.
- Complete participant and alternate payee details: Legal names, dates of birth, Social Security numbers, and addresses.
- Exact division language: Whether you’re splitting by percentage, dollar amount, or fraction of contributions accrued during marriage.
We always recommend confirming QDRO formatting preferences with the plan administrator, or requesting a sample if available.
What Makes PeacockQDROs Different?
At PeacockQDROs, we’ve completed thousands of 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’ve seen how easily QDROs can fall through the cracks. That’s why we maintain near-perfect reviews and pride ourselves on a track record of doing things the right way.
If you’re unsure about what a QDRO is or how to avoid errors, take a look at our advice on common QDRO mistakes, or learn about how long it really takes to get a QDRO finalized.
Getting Help With Your QDRO
If you’re dividing the Lift Power, Inc.. Profit Sharing 401(k) Plan in divorce, a QDRO is essential. This is not a document you want to DIY or download from a generic source. Every plan has its own rules, formats, and timelines—and the Lift Power, Inc.. Profit Sharing 401(k) Plan is no exception.
We’ll make sure the QDRO is done right, from beginning to end. That means your interests are protected, and any approved settlement is implemented properly by the plan administrator.
Final Thought
Dividing a 401(k), especially a complex account like the Lift Power, Inc.. Profit Sharing 401(k) Plan, requires experience and attention to detail. Don’t trust your financial future to shortcuts or guesswork. Get professional guidance throughout the process.
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 Lift Power, Inc.. Profit Sharing 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.