Dividing your assets
Before you can figure out how to fairly divide your marital assets, you need to know how much you have. You should both get summary plan descriptions (SPDs) of your 401(k)s and other retirement accounts. Then, reach out to your plan administrator to learn about any rules your 401(k) plan has regarding the division of your assets. Share this information with both parties' divorce lawyers. They'll need it to draft an agreement that the plan administrator will accept. If the administrator rejects your plan, you'll have to go back to the drawing board.
When both spouses have a roughly equal amount of savings in their 401(k)s, each may elect to keep their own savings and leave the other's untouched. However, when one spouse has substantially more wealth than the other, things become more complicated.
You can't just take the sum of your collected retirement savings and divide it in half. You also have to weigh how the government taxes the money. Traditional 401(k)s are tax-deferred, which means you owe taxes on your distributions. Roth 401(k)s are funded with after-tax dollars, so you don't owe taxes on your withdrawals. So, Roth savings are more valuable than tax-deferred savings, since you'll eventually have to pay some of the tax-deferred savings back to the government.
Your financial advisor and divorce lawyers can help you work with your spouse to come up with a solution that works for both of you. The longer your divorce proceedings drag out, the more expensive they become for both of you.
