401K statements post separation

[InDenial]

Well my Someday-To-Be-X has finally gotten off his duff about our divorce.  After prompting AGAIN, last week he sent me his 401K statement for the time of our separation/filing last summer.  I had sent him mine months ago.

In mediation last fall we had agreed to use a QDRO to transfer half the difference of our 401Ks from him to me, using the values around the date of separation/filing.   

(And yeah I'm aware his 401K is worth less today than it was last summer.  I'm not very sympathetic because it's been his choice to stall after he initiated the whole separation/divorce. It's been my choice to not to serve him with discovery papers because I didn't want run up a lot of legal fees or ramp up the level of hostility.)

His lawyer was supposed to be drafting our mediation agreement into a divorce agreement.  I sent him my revisions last November but then got nothing back.  Apparently he's started his lawyer moving again.

Today he tells me his lawyer needs our current 401K statements.

To me this seems like sheer nosiness.  Is this a legitimate request?  Any one have any insight into whether it's legally relevant?

[livealittle]

it may be to see that he or you haven't taken loans against them or disbursed them or rolled money out of them.

[InDenial]

Well the other shoe has dropped.

He's now saying that he wants to use the current values of our 401Ks, after making some kind of adjustment for contributions since separation.

He claims his laywer claims that this is "what the courts like to do".  Color me skeptical!  I suspect his lawyer wants to get a better deal for his client.

So while I wait a call back from my own lawyer, I'd appreciate hearing any experiences other people have had when there was a delay between separating and finalizing the divorce.  What date did you use for valuing the 401Ks or other assets?  If it was after separation, how did you adjust for contributions made after separating?







 

[livealittle]

everything I've seen uses date of separation or date of filing, but nothing I've seen makes major adjustments if the market goes down in the interim.  I imagine if the market had went as far the other way, he'd be wanting to use date of separation.

if you already agreed to use date of separation, i'd stick to that.

[Lee Borden]

Just know that he has a point. If the mediated settlement breaks down and the two of you have a trial, the judge is almost certain to use the current value of the funds. So you may seek a middle ground somewhere.

[InDenial]

Thanks for the feedback Lee.

I cynically wondered along with LiveaLittle whether if things had gone the other way, if the market had gone way UP, whether he would still want to use current values.

[livealittle]

maybe you could get a transfer in kind

which means you actually own the number of shares rather than being given their dollar values as of today.

like if you were to split 100 shares of ABC mutual fund, you get 50 shares, then you can sit on them until they recover in value. they would prob be valued at current for your basis and you'd prob have to pay tax on the gains, but maybe you could do that rather than taking money.   just throwing ideas out there, I have no idea if you can even do that.

[InDenial]

That is an EXCELLENT idea, thanks!  He wants to give me cash, but if I believe the economy will recover, I might prefer shares.

[livealittle]

talk to a tax and an investment advisor

I know in some cases you can do transfers in kind which is where you move things from under a retirement tax shelter umbrella - like a Roth IRA - to just an investment account.  If it's lost money you don't get to claim the loss on your taxes, but if it's gained, you have to declare the gains.


i just know about some stuff we just had to do with our Roth, but as far as a divorce settlement, I have no idea what you can and cannot do.