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Division of assets

Discussion in 'Division of Marital Property' started by KDPoolguy, Jan 1, 2020.

  1. KDPoolguy

    KDPoolguy Law Topic Starter New Member

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    Hi all, thank you for all your help. My wife filed for divorce and she was the higher earner throughout the 4 year marriage (together for 10 years). No kids, Living in California. She’ll be giving me alimony, we’ll split the joint checking, and she will likely buy out my 50% interest in the house. The rest is the issue.

    We have a joint checking account and always maintained separate checking and savings accounts. We both have 401ks and Roth IRAS, I only want to consider the stuff we accumulated during the marriage.

    She has a 401k and Roth that only has monies accumulated during the marriage and we mainly put that cash in there to lower her taxable income. I too have a 401, but doesn’t have nearly as much money in it, and I have a rollover IRA from before the marriage. Just to be clear, I am entitled to 50% of this 401k of hers, correct.

    Also, since we had separate bank accounts and accumulated our own savings, can I find out how much her and I have accumulated during the marriage time and then we split that?

    Thanks...oh and divorce sucks.


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  2. adjusterjack

    adjusterjack Super Moderator

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    As you can see by my avatar I'm in Arizona, also a community property state, and my divorce issues were similar as, at the time, my ex had greater earnings and a larger 401(k).

    Let's start with your rollover IRA. If nothing has been contributed during your marriage it, and all the earnings, is your sole and separate property and you keep that.

    Your 401(k). If you made any contributions to it during the marriage, your income is marital income. Therefore your 401(k) has been comingled and had become community property. She gets half.

    Same goes for her 401(k) and both your Roths. Contributions made during the marriage make them community property.

    Same goes for your separate checking and savings. Each of you used them with your marital income. Each of the accounts is subject to the split.

    Understand that you don't have to split everything down the middle. You can work out offsets if you agree to them.

    A word of caution. Do you know what a QDRO is? It's a Qualified Domestic Relations Order and it's used to divide the Roth, IRA and 401(k) accounts. Google it for more information. Make sure that they are prepared prior to the decree as they have to be signed by the judge at the same time the decree is signed. Then they get served on the custodians of the accounts (which are not necessarily the employers) and the accounts are divided in two.
     
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  3. army judge

    army judge Super Moderator

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    Tomorrow morning go to a divorce lawyer of your choice, and retain her/him to assist you sorting out the finances of your marriage in preparation for what you'll receive as your share of the marital assets.

    No need to fret about PAYING the lawyer out of your pocket.

    The lawyer knows how to get paid out of the marital assets.

    Once you've retained the lawyer, ask her/him all of your questions.

    During the pendency of the divorce, do yourself a favor and remain silent to everyone, EXCEPT that great lawyer you're going to hire tomorrow (or in the coming week)!!!
     
  4. Tax Counsel

    Tax Counsel Well-Known Member

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    But even among community property states, the rules vary, and the OP needs to consult a California divorce attorney as community property and division of assets in that state can get complex.

    This is one example. It is not that simple. If contributions were made of community property then the in general part of the 401(k) is indeed community property, too. But it would not be exactly half. The portion of the 401(k) that was prior to the marriage and the earnings on that would not be community property and would not be split. So a computation will have to be made of what the community property interest is taking that into account. The same with the other accounts and assets.
     
  5. zddoodah

    zddoodah Well-Known Member

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    Are you saying she has agreed to pay you alimony? I ask because there's very little chance the court would order her to pay alimony for such a short marriage.

    401k's and IRAs are assets. They are presumed to be community property unless one spouse or the other proves that they (or some portion thereof -- this is the point that "Tax Counsel" made) are not community property. Community property is divided evenly upon divorce.

    We have no reason to think you lack this ability. If your question was whether the law provides a mechanism for discovering the balances in such accounts, the answer is yes.
     
  6. KDPoolguy

    KDPoolguy Law Topic Starter New Member

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    Thanks all,
    Again California community property issue.

    Now the issue of the house down payment. The house title is in both our names and we both pay down the mortgage equally.

    The down-payment was from her inheritance, but this issue of transmutation under Family Code section 2640 is the issue. We have no pre-post marital agreement. Am I entitled to 50% of the down payment also?

    My lawyer says I have a clear case to 50% since the use of the down payment was for our marital communal home, and the title is in both our names.

    Thoughts?


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  7. adjusterjack

    adjusterjack Super Moderator

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    I agree. Though not necessarily 50% of the down payment. You'd be entitled to 50% of the "equity" in your home regardless of who put in what.
     
  8. adjusterjack

    adjusterjack Super Moderator

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    Please keep all your discussion about your divorce to this thread. I deleted your new one as a duplicate.
     
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  9. KDPoolguy

    KDPoolguy Law Topic Starter New Member

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    I concur, that’s well said. 50% of the equity and the equity is=
    1) pay down amount-remainder of loan
    2) down payment
    3) increase in house value

    So if spouses don’t agree on this ‘transmutation’ can a judge ultimately decide?


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  10. adjusterjack

    adjusterjack Super Moderator

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    Current market value (what it would sell for) less the current loan balance. Google your address and you'll find several real estate websites that give you an estimated selling price. They will vary. You can take an average. If you and spouse can't agree on the market value you can pay for a professional appraisal.

    Oh yes. A judge will definitely decide on anything you and spouse don't agree on. Meantime a pair of lawyers are cheerfully depositing your money into their bank accounts. Lawyers just love people who fight out everything in court.

    Or, you can flat out sell the house and split the proceeds after paying commissions and the loan balance. Then there's no dispute on "value."
     
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