Liquidating assets prior to divorce
affluent women assets Bedrock bedrock Divorce Bedrock Divorce Advisors career women certified divorce financial analyst credit rating disinherit your husband dissipating marital assets division of assets divorce divorce attorney divorce financial adviser divorce financial advisor divorce financial analyst Divorce Financial Checklist divorce financial planner divorce financial strategist divorce lawyer divorce tax issues divorce team divorcing women divorcing your husband financial documents financial expert financial records firm financial foundation high net worth women hire a qualified divorce team how to protect your credit score during your divorce Jeff Landers Jeffrey A Landers Jeffrey Landers legal separation marital assets marital property marriage personal finances personal finances for divorce qualified divorce team Splitting Assets spouse women women business owner As a Divorce Financial Strategist™ I am frequently asked, “Can I take money out of my 401K before/during my divorce?
” Or sometimes it is asked like this, “Can my spouse take money out of his/her 401K before or during our divorce?
” The short answer is, “It depends.” Typically, the amount in a 401K plan that is accumulated during a marriage (and its appreciation, if any) is considered martial property.
In Equitable Distribution states, this means that the amount in the account (along with all other assets and liabilities) should be divided according to what is “fair and equitable.” In Community Property states, 401K funds accumulated during the marriage are divided in accordance with that state’s laws (usually 50-50).
However, a potential issue is that funds might be withdrawn by the account holder before or during the divorce (your spouse cannot take money out of your 401K and vice versa).Financial infidelity and lies are all too common in marriages. In a joint bank or brokerage account, both parties have full control over the assets.One in three people admitted to financial infidelity against their partner, according to a January poll for the National Endowment for Financial Education. So can you imagine the deception that can occur during a divorce? As a divorce financial planner who often works with the "out spouse" -- the term for the partner in a marriage who was never plugged in to the finances, managed the cash flow, paid the bills or had relationships with the CPA, financial adviser or attorney. I could systematically transfer cash and/or investments to a buddy's account, and then once the divorce is finalized, he or she could transfer it back to an account in only my name.I've seen financial deception firsthand as the more savvy and informed "in spouse" tries to cover up cash, hide investments and fabricate expenses and debts. The advantage in transferring the assets to a friend is that when I am legally obligated to report marital assets, these transferred assets are not technically part of our marital property.3. With a little planning, this is a terrific way to shield assets; and if caught, it's easy to play the "aw shucks, I totally forgot about this" card.If you are considering a divorce or in the middle of one -- especially if you are the out spouse -- you need to look out for financial deception because it can dramatically affect the assets you obtain and the marital and child support you receive. If I knew I was going to file for divorce next year, I could instruct the IRS to use this year's refund for next year's tax.