401K plans and divorce

Question Detail

If my spouse waives his right to my 401k plan, is there any circumstance that the court will still award him half or a portion of my 401k plan?

Answer

It is theoretically possible that a court can disturb an agreement to waive rights to property, but it is unlikely.  Courts will generally treat agreements as contracts, and thus are likely to strike an agreement only if it is unconscionable, induced by fraud, undue influence, duress or is against public policy. The judge cannot “reject,” nullify, or modify the provisions of an agreement merely because of his or her personal belief that a different arrangement should be made.

A marital settlement agreement, or MSA, can be used as a contract between spouses regarding the division of property that would otherwise be subject to community property laws. An MSA is subject to general contract laws, meaning that it can be found invalid if terms are against public policy (which includes, but is not limited to, (a) abrogating the statutory child support duty or impinging on the court’s jurisdiction to award child support, (b) limiting the court’s exercise of child custody jurisdiction, (c) “altering legal relations,” (d) “promoting dissolution,” and (e) providing for “fault”-based penalties at marriage dissolution) . The MSA can also be found invalid if entered into as a result of fraud, duress, menace, undue influence, or other factors which may make the agreement void or invalid.  Generally, an agreement such as the MSA is favored.  Hence, if there are no legal or equitable grounds for rescission or reformation it is binding on the parties and the court without express approval.