menomama wrote:

- quote -

And the devil is IN the details; always. Speaking of the
devil,......

You might be well advised to consult legal counsel at this
point. As for the second 401K plan, being transferred, it's
possible that he rolled it over into an IRA at T Rowe Price,
perhaps even naming another beneficiary. Perhaps! I can't
be sure, but that is a possibility. And if this is the
case, he can't borrow against it.

ChEAr$,
Harlan Lunsford, EA n LA

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menomama wrote:

- quote -

You now need an attorney for no other reason than to protect
yourself in case he is hiding something else. The tax
consequences are simple: The $13K is yours tax free. Get
it now because he may try to make it look like alimony after
the fact.

Dick

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"menomama" <meno.mama[at]hotmail.com> wrote:

- quote -

As becomes apparent later. Saving you from yourselves is
one function a good lawyer will perform. As luck has it we
can help you here with the issue you've raised, but we have
no idea whether there are other mistakes looming.

<snip
- quote -

Which can be done without anyone taking a loan or writing
checks and without tax consequences. The procedure varies
slightly depending on whether the money is still in a 401(k)
or is now in his IRA, but the bottom line is that each of
you winds up with half in a retirement account to do with as
you please.

Note that this is different from your proposals which put
all the burden on him to come up with the cash, which is
decidedly unfair to him. Also note that if you want to use
the money to pay bills you are the one who will owe the
income tax and the premature distribution penalty.

See IRS Publication 575 (401(k)'s) or 590 (IRAs).

You didn't mention 2007 filing status, but IIRC you will
still be legally married 12/31/2007. It may cost you a
little in 2007 tax, but I urge you to file Married, filing
Separately for 2007. Otherwise you're potentially entangled
with him financially for another 13 years.

--
Phil Marti
Clarksburg, MD

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Husband and I are divorcing.

Simple divorce, no real estate, no kids, married less than 5
years, no lawyers involved. Community property State.

Filed already, not final until March 2008. Agreed to not
touch each others 401K's as it would have been a wash. This
agreement is included in divorce paperwork wording.

HOWEVER, I just found out that he had another 401K that WAS
NOT declared to me or included in divorce paperwork. All
funds that went into this 401K were contributed while we
were married. Balance that is vested, is $26K so I am going
after half.

He claimed to have "forgotten" this account. Yeah, right.
If he's that far gone mentally, he needs to be in a home.
;-)

He has verbally, and via email, agreed to pay me half.
Wants to write me a personal check for 1/2 of my 1/2 in next
month, the balance next year so he spreads the tax hit over
2 years.

*Based on previous history, I don't have any reason to trust
that he will honor his word.*

I suggested that he take a loan from this 401K to pay me my
half of the balance, then pay himself (the 401K) back.
Seems like a win-win. I get my $ now and don't have to fret
that it won't happen in the future, and he doesn't get hit
with taxes if he pays himself back.

ANOTHER HOWEVER, he is NO LONGER working for the business
that this 401K was established through. AND (this is how I
found out about the account) the 401K was recently
transferred from one company to another; i.e. from Fidelity
to T. Rowe Price. So, not sure if it's still considered a
401K (like did the business he used to work for transfer
their 401K plan from FI to TRP?) or if it was transferred
because he's no longer an employee?

Am hoping he can take the loan because that will assure I
get my half vs. having to trust an untrustworthy person!!

Also, what tax implications would there be for me if he pays
me via check and I use some of the money to pay off a credit
card, some to pay on my car loan and bank the rest?

THANKS!!!!! (sorry to be so wordy, but felt it pertinent to
give all the details)

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >