Page 1 of 3

Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 4:07 pm
by DaddyofOne
Married 9 years. Separation was in August.

Judge ordered STBX to pay me a lump sum of $750 a month combined spousal/child support.

Found out during the hearing she has approximately $300k in her 401k.

Marital home was bought before we were married and it's all in her name. House was purchased for approx $275k.

The car I drive is in her name and is paid off. It's worth approx $10-15k.

What can I expect to ask for in regards to a buy out? I'd like to avoid a quadro if possible.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 4:12 pm
by BartSimpson
Do you have an attorney?


Because whose name is on something doesn’t matter in divorce. Like the car . . . It’s 50/50.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 4:26 pm
by DaddyofOne
I do. Just wanted some insight here before communicating with him and costing me more.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 4:28 pm
by TJinCA
As mentioned most of that stuff is 50/50 no matter whose name is on the title.

You probably won't be able to split the 401K without a QDRO, so unless you're going to give her the whole thing you're stuck with that. If you do plan to give her the entire 401K keep in mind that the money is pre-tax so the value is less than, for example, $300K in cash today or $300K in home equity.

Another possible consideration - did she contribute the entire amount during the marriage, or did she have some saved up before that? If so, she may be able to make a claim that some portion of the contribution is her separate property. In that case you'll want a forensic accountant to review it and give you a read on how much of the contribution and how much of the growth is community property and how much is her separate property.

A lot of the info on this stuff are very googlable - you can find out a good bit and also be able to ask more specific questions of the experts you engage. Just make sure what you're looking at is in the context of your state's Family Code - every state is different and it can make a big difference.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 4:38 pm
by DaddyofOne
I won't be giving her any of my 401k. She has $300k in hers and I have $46k in mine. I thought the calculation was half of hers minus half of mine would equal an amount and in this case she would owe me. I'm sure she made a down payment on the house before she bought it but I don't know how much it is.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 4:47 pm
by TJinCA
That's the basic calculation, you should be splitting $346K (assuming none of either is from before the marriage). Which means she will need to transfer (if I did the math right) $127K to you. It's cleanest if you split pre-tax stuff (401K, IRA) separately from everyone else and keep it in a pre-tax state by rolling into another 401K or IRA.

But you'll probably still need a QDRO for her to transfer the $127K without tax consequences to either of you. Check with the plan administrators for how to and forms to fill out.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 4:59 pm
by DaddyofOne
If that's the case after that's complete I'll be needing to withdraw some to pay off debts. I know there's a double penalty on that so what's the easiest way to do that?

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 5:00 pm
by Trevor
I avoided that since we both had (employer-based) accounts at the same brokerage. Simple form to transfer funds between separate accounts. No lawyer necessary, though you may need copies of the final orders.

If you don't have an account at her broker, call them and ask about this topic; if necessary and if they have such a process, open an account for this purpose. If at some point later you want to change brokerage, you can alway do that yourself, without her involvement or knowledge.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 5:02 pm
by Trevor
DaddyofOne wrote:If that's the case after that's complete I'll be needing to withdraw some to pay off debts. I know there's a double penalty on that so what's the easiest way to do that?

Take a loan against your balance; no penalty for this. And debts aren't all bad - calculate whether to borrow against your retirement, or structure a repayment plan that you can handle.

Re: Financial questions post Pendente lite

Unread postPosted: Tue Dec 26, 2017 5:02 pm
by Chaos
Hold up. All of that money was contributed during the marriage? There's no premarital money in either 401k?