My wife and I got divorced three months ago. I was supposed to transfer half of my retirement assets to her within 30 days. I did try but was unsuccessful. I called Fidelity and asked them to give her half of my IRA. They told me to send a letter, which I did, but they still didn’t move the money. Also I asked my HR director to figure out how to move half of my 401(k) to my ex and that hasn’t been done either.
She threatened to file a contempt if I don’t move the money by the end of next week. I’m trying to move the money but no one seems to be listening to my requests. How can I make them pay attention so I don’t get into trouble?
If you had a lawyer, they would be helping you navigate these post-divorce loose ends that many people struggle with. Retirement assets take longer than 30 days to divide. But, you can set things in motion in that time frame, which I suspect is what the judge who approved your agreement thought you planned to do. And, if you do set things in motion, even if the transfer is not complete, you are not in contempt.
So, here is how you fix the issue. The Fidelity transfer is easy. You send them a letter directing them to make a tax-free roll over of half of the assets in your IRA “in kind” (meaning half of all investments without selling stocks) into a designated rollover IRA in your ex’s name. The catch here is (a) she needs to open a rollover IRA account into which the assets can be transferred and tell you the account number, and (b) she needs to send a letter to Fidelity authorizing receipt of the assets into her account. You are not in contempt if she doesn’t do her part.
The 401(k) requires professional help. In order to divide certain types of retirement assets including a 401(k), you need someone to draft a Qualified Domestic Relations Order that, when signed by the judge, will be sent to the plan administrator directing them to separate out half of the account as of the date of divorce for your ex-wife’s benefit. There are professionals who specialize in preparing these documents. Any experienced family lawyer can refer you to one. Once the QDRO is drafted, the drafter sends it off to the plan administrator for pre-approval. When it comes back, both parties will need to sign the QDRO and then it gets submitted to the judge who handled your divorce.
When you receive the signed QDRO back from the judge, you mail it to the plan administrator and usually several months later, you will receive notice that the transfer is complete.
