Divorce and 401K Question

[Sweety_tweety]

My DH and I have not been getting along for some time. We have decided to separate and see if that changes any feelings. Don't think it will.

Anyway, I started looking into what to I should do to get ready for a divorce. We do not have any kids. My husband had a shared account for large purchases/house items, but otherwise we had our own checking and savings. The monthly bills we split. My DH has $4000 cc debt; I have none. He spends more than he makes. For years he did not contribute to his work 401K; I have considerably more in mine.

I just read that in a divorce my 401K can be split. I find this incredible--he had a choice--I make the choice to save and he does not and he may be awarded some/half of my 401K.

If the judge orders my 401K to be split, can he decline. I can already see this can turn really nasty. We are both in agreement that we just don't get along and just trying to be decent about everything. Just looking for some advice.

 

[figment52]

My DH and I have not been getting along for some time. We have decided to separate and see if that changes any feelings. Don't think it will.

Anyway, I started looking into what to I should do to get ready for a divorce. We do not have any kids. My husband had a shared account for large purchases/house items, but otherwise we had our own checking and savings. The monthly bills we split. My DH has $4000 cc debt; I have none. He spends more than he makes. For years he did not contribute to his work 401K; I have considerably more in mine.

I just read that in a divorce my 401K can be split. I find this incredible--he had a choice--I make the choice to save and he does not and he may be awarded some/half of my 401K.

If the judge orders my 401K to be split, can he decline. I can already see this can turn really nasty. We are both in agreement that we just don't get along and just trying to be decent about everything. Just looking for some advice.

I am not a lawyer but work as company admin for our 401k and I have seen many things. The best answer I can give with the information you provided is "it depends". It can vary depending on how long you were married, where you live and what other assets you have to divide. Even though he made the choice not to save his attorney could argue that you received benefit of his earnings through shelter, food, etc and therefore the 401k should be divided. The fact that you kept all funds separate and both contributed to a 'household fund" may or may not make a difference. A good attorney can prove things you would never expect to see happen.

An attorney or CPA could provide you an objective opinion as I'm sure you are struggling emotionally right now.

 

[Pakey]

In California, a community property state, they are considered marital assets and would be included in the division of assets.

 

[shortbun]

My DH and I have not been getting along for some time. We have decided to separate and see if that changes any feelings. Don't think it will.

Anyway, I started looking into what to I should do to get ready for a divorce. We do not have any kids. My husband had a shared account for large purchases/house items, but otherwise we had our own checking and savings. The monthly bills we split. My DH has $4000 cc debt; I have none. He spends more than he makes. For years he did not contribute to his work 401K; I have considerably more in mine.

I just read that in a divorce my 401K can be split. I find this incredible--he had a choice--I make the choice to save and he does not and he may be awarded some/half of my 401K.

If the judge orders my 401K to be split, can he decline. I can already see this can turn really nasty. We are both in agreement that we just don't get along and just trying to be decent about everything. Just looking for some advice.

My brother got half his wife's 401K. He didn't have one. He got half the house too and she had made the larger part of their income. But, the money was earned while they were married and they had a child together so she would have gotten his if she had stayed home.

 

[Sweety_tweety]

Thanks for the info.

I really don't mean to sound greedy. He was laid off about 1 1/2 years ago where he had a 401K. The new job does not have a 401K. I finally convinced him about 6 months ago to open an IRA--he only contributed $500. The Comcast cable bill is more important than his retirement. I have a bad feeling that I am going to pay for his poor spending habits. Ughh!

 

[clh2]

Do you have any back-up info on how much your 401K was worth when you got married? I would think that any fair judge would consider that amount to be yours, including a fair estimate of the market appreciation on that amount, and that if there was a split of the 401K, it would only be based on the value of what you contributed since you were married as well as the market appreciation.

Of course - just because I think this is logical, doesn't mean that any one else would. I only tossed this out as something to consider.

 

[Darcy03231]

First, you should really consult with a divorce attorney in your state. State laws differ greatly from state to state, so what may be the norm in one state might not be the norm in another. For example in our state child support ends when the child turns 18 or graduates from high school, whichever occurs last. One state over child support continues through college. You should make a list of all your assets and debts and see a lawyer. A lot can depend on how long you were married, too.

I worked as a family law paralegal for over 25 years. I can tell you that in our state your 401k is considered a marital asset and subject to division. If you had it before you got married, that portion could be awarded to you and only the amounts put in and the interest earned during your marriage divided.

If you and your husband come to an agreement about all your assets and debts, the judge will just sign off on it (at least in my state). As long as you agree, they don't care how you divide it up.

 

[Cheshire Figment]

What state are you in, how long has the marriage lasted, and what are the approximate ages of each of you. All of these will have an effect on the results.

 

[Polyluvr]

My brother's divorce was just finalized and he had to give her a check for 1/2 the amt in his 401k; talk to an attorney and to you

 

[tvguy]

Do you have any back-up info on how much your 401K was worth when you got married? I would think that any fair judge would consider that amount to be yours, including a fair estimate of the market appreciation on that amount, and that if there was a split of the 401K, it would only be based on the value of what you contributed since you were married as well as the market appreciation.

Of course - just because I think this is logical, doesn't mean that any one else would. I only tossed this out as something to consider.

This is why rich people do pre-nuptual agreements.
Yes, there is what is fair....... there is what is right...... there is what is ethical......... and THEN there is what the law says. And the law is the only one that matters.
A lawyer....or a marriage counseler, or both are your best resources right now.
You could even be in the position of being forced into paying alimony.

 

[natenapril]

My brother in law also got half of his wife's 401K and half of the house AND alimony. He made upwards of $400,000 by the time he got half of the house and 401K.

 

[sndral]

If the judge orders my 401K to be split, can he decline. I can already see this can turn really nasty. We are both in agreement that we just don't get along and just trying to be decent about everything. Just looking for some advice.

If the two of you agree, then you can divide your assets however you like, thus you may be able to negotiate that he gets this or that and you get your 401k. The law is really only there if the parties can't agree, or where there are children or where one party will be penniless as the result of the agreement.

Each state's divorce property law is different. Typically, if the money you contributed to the 401K was earned during the marriage, then he has a right to some of it, here in Ca., a community property state, he would get 1/2. And you would owe half of his $4000 credit card bill. If it comes to that, be very careful about how you pay him his portion - if it's done incorrectly you could owe taxes on the money from your 401k that he just got. Other states will take into account other factors, including conduct during the marriage, relative earning power of each party, etc., in deciding what is fair.

If you have a substantial amount it really is in your best interest to speak with a lawyer, IMO. Nothing about divorce feels fair, especially when someone who has been financially responsible has to pay off someone who has been irresponsible.

 

[jam217]

I agree with the others that it depends on what state you're in. Also, in my situation, we agreed on a property settlement ourselves, and the courts simply approved it.

I did get half of my ex-husband's 401K. However, no money exchanged hands. I used my half to pay him for my portion of the house.

 

[livie1205]

I got half my ex husbands 401k...it was in place of alimony.I was a SAHM by HIS choice so he didnt want to pay alimony so I got half the 401k,half of the money for the home,half of checking/savings accounts (good amount in them) and CS for my son which I have had to take him back to court many times and now owes me 17,000 in back CS! I have full custody with no visitation at this time so I take on full support of my son,including health/dental care.He is ordered to pay be 696.00 a month.

 

[bicker]

I have a bad feeling that I am going to pay for his poor spending habits. Ughh!

Perhaps. Keep in mind that in many states the principle is that when you're married, everything gained and everything lost is shared. You may feel like you've made separate and therefore separable decisions, but generally marriage negates that claim: You're making decisions on each other's behalf every time you make a decision regarding money and assets acquired during the marriage.

 

[PatsMom]

I've seen a number of divorces happen to clients. And the answer to the 401(k) question is that it depends. State rules vary - here in NH if you and your former spouse agree on a division of property, the judge or marital master will simply sign off on the agreement. But if there is judicial involvement, they tend to want to make things even. So if your husband wants to even up the retirement funds, the court might agree. The attorneys will be ordered to draw up a qualified domestic relations order (qdro) and the plan administrator will have to divide the account as directed by the court.

As someone has already mentioned, the theory is that during the marriage, you would not have saved as much as you did if there wasn't another person contributing to housing, etc.

In any divorce, it is best if the parties can agree. Otherwise the ones who make the most money are the lawyers.

 

[tomthebarncat]

While you are trying to decide if you want a divorce, your spouse will continue to foolishly spend money. I would lawyer up now as not only are assets up for grabs so is debt. My own experience with divorce is that partners take on new and exciting personalities. Things are said and done, that make you wonder what happened to the person you married. Emotions aside your business is now the business of marriage dissolution!

 

[PatsGirl]

My advice to you is do EVERYTHING you can between yourselves (and as quickly as you can before it gets really nasty) to separate yours, mine, and ours and get it in writing as soon as you agree. Because there are no kids, there are just the material items and so much easier and less emotional

It cost me more than $12K to maintain custody of my daughter even though her father did not really want full custody. This could have cost far more as I've seen with my friends. Fortunately, we had only her and child support to argue. I really wish we could have done it with a mediator but it wasn't a mutual separation, I wanted it he didn't so he was making sure I paid for it.

Each of you should make a list and separate things out the way you think they should go and work from there in small doses but in writing when you do come to an agreement each and every time. Like it was said before, if you arrive at court with your own agreement the judge will sign off, you both save thousands of dollars and everyone wins. Of course, this doesn't happen very often so best of luck to you!

 

[CarmenPeteron]

He is entitled to half of you 401K. Make sure you get yourself a good lawyer so that you are not stuck with paying off his credit card debt as well a losing half of your 401K.

 

[Robmom]

When I got divorced, I asked about that, and my lawyer said if I want half of his, he would be entitled to half of mine. So, it didn't make sense to split it. So, we just kept our own and didn't split it.