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Found this on the internet. Good information:
LAYMAN QUESTION: I am going through a divorce and my soon to be x-wife withdrew 15K of her 401k that had 31k. 7,500 was withdrawn when she hired her attorney and just found out she withdrew another 7,500 shortly before out court date.
LAWYER ANSWER: You should ask your divorce attorney to draft a QDRO (Qualified Domestic Relations Order) relating to the 401(k) immediately, and send the draft to the plan administrator.
Under ERISA, once a plan administrator is notified of a pending QDRO, it must place a hold on the account for up to 18 months, or until they receive a 'qualified' order, whichever comes first. That will stop future withdrawals. You should then be sure to address all retirement funds, including that 401(k) plan, when addressing the identification and division of marital assets. You should be sure to address the withdrawals when discussing marital assets.
Keep in mind, however, that you may not be entitled to all of the 401(k) balance; that will be an equitable question for the court to consider in dividing the marital assets, or for you to resolve in a settlement. In the final divorce decree, or right after the decree is entered, your attorney can prepare a QDRO that is consistent with the court's order, to submit to the plan administrator.
http://www.avvo.com/legal-answers/i-am-going-through-a-divorce-and-my-soon-to-be-x-w-1411672.html
LAYMAN QUESTION: I am going through a divorce and my soon to be x-wife withdrew 15K of her 401k that had 31k. 7,500 was withdrawn when she hired her attorney and just found out she withdrew another 7,500 shortly before out court date.
LAWYER ANSWER: You should ask your divorce attorney to draft a QDRO (Qualified Domestic Relations Order) relating to the 401(k) immediately, and send the draft to the plan administrator.
Under ERISA, once a plan administrator is notified of a pending QDRO, it must place a hold on the account for up to 18 months, or until they receive a 'qualified' order, whichever comes first. That will stop future withdrawals. You should then be sure to address all retirement funds, including that 401(k) plan, when addressing the identification and division of marital assets. You should be sure to address the withdrawals when discussing marital assets.
Keep in mind, however, that you may not be entitled to all of the 401(k) balance; that will be an equitable question for the court to consider in dividing the marital assets, or for you to resolve in a settlement. In the final divorce decree, or right after the decree is entered, your attorney can prepare a QDRO that is consistent with the court's order, to submit to the plan administrator.
http://www.avvo.com/legal-answers/i-am-going-through-a-divorce-and-my-soon-to-be-x-w-1411672.html
Cheryt, just as an FYI, I just read of a case where the 401-K plan administrator won't release the 401-K funds after divorce without a court order. That means they have to pay an attorney to prepare, get the judge to sign, file (some courts insist you file it with the court clerk), and send the order to the plan admin.
Just thinking out loud, but maybe the precaution for the future would be to have in place specific wording in the divorce decree directing the plan admin to release all 401-K funds instead of having to pay even more money for a separate order.