Devildog1981 Posted February 9, 2010 Posted February 9, 2010 Just curious if anyone has dealt with having retirement accounts such roth IRAs, TSP (like a 401k for gov employees) and going through possible divorce. I am going to talk to attorney about it but just curious. I have a couple retirement accounts that I opened before I got married but have consistently contributed during our marriage. She would of never saved or invested if I had not. I have roughly 50k in these funds in my name. I have made more steady income not that it matters. Will she be getting half of the funds? They get taxed hard for early withdraw and I can't just transfer them to account in her name. She has about 8k in a 403b and I don't want any of it.
mimidarlin Posted February 9, 2010 Posted February 9, 2010 I guess it depends on the state but assets and debts are distributed equitably for the most part. My husband would owe me a good chunk of change and one option for him would be to rollover his IRA to me. There is a process for this in my state that avoids tax penalties. The other option is go give more property in lieu of the retirement accounts. My husband doesn't want to divide it or lose it so he would rather pay me off in installments if it gets to that. So...I added up our assets (retirement included in this) subtracted the debt.... Then from the asset amount I would receive I subtracted my IRA. Left his on his side of the assets.
carhill Posted February 9, 2010 Posted February 9, 2010 IME, depends on jurisdiction and governing laws of that jurisdiction. We're community property here in Cali, so contributions made after marriage to the asset and earnings/appreciation the asset has achieved will generally be divided 50/50 directly or via substitution of other asset types. In reality, if the parties agree to a fair settlement in an uncontested action, the court will approve it without a lot of forensic accounting. So, say your retirement was valued at 20K prior to marriage and you made contributions to it and it made earnings and increased in value 30K during the M. The 20K would be considered separate property, with the 30K being divided equally. If the entirety of the 403b, 8K, was achieved during the M, then, as marital property, it would be split 50/50. The method and specifics of distribution will be handled by a DRO or QDRO from the court, if retirement assets are to be distributed from one spouse to another during the final judgment phase of the divorce. IANAL and am only familiar with Cali statute since I live in Cali and am getting a divorce in Cali. YMMV. The more amicable you can be, the more likely these details won't be a PITA. Good luck
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