Guest J.D. Posted April 4, 2012 Share Posted April 4, 2012 I am not a professional. I have searched as best I can for answers in these Forums. Wife's 401K (Fidelity - approx. $185K) required spousal consent to change beneficiary (me). Big law firm she worked for went bankrupt. Suddenly, all the funds are gone and I just discovered that she rolled it into a Fid. IRA with her sisters as beneficiaries; not my name. Her explanation: an email said that she had to end the 401K b/c of company bankruptcy and that I do not "deserve" anything. In Virginia - not a Community Property State. -- Wife went with partner (as legal sect'y.) to another big law firm where she now has another 401K started Approx. $6K. My understanding is that the 401K "Plan" continues even tho' company is gone with appointed P.A.'s. Q. - Would Fid. need spousal consent to do the rollover AND change beneficiary? (Possible forged signature?) Talked with atty. today (re: divorce) who said he would need to bring in a CPA. $5K retainer for atty. - Not Sure I can afford the CPA. From what I have read here and elsewhere, I feel that I know more than the divorce atty. re: 401K, ERISA, QDRO, tax consequences, etc. Any advice, suggestions, things to ask, etc. would be most appreciated. Note: I just turned 70 1/2; so, the MDR kicks in this year. Thanks! <gut wrenching stuff for me> Link to comment Share on other sites More sharing options...
QDROphile Posted April 4, 2012 Share Posted April 4, 2012 Most 401(k) plans do not require spouse consent for distribution. Plans that provide an annuity as the normal form distribution option will require spouse consent to a distribution that is not in the form of a joint and survivior annuity. A plan can be designed to require spouse consent, but most plans do not add provision that increase administrative burdens beyond what the law requires. Rollover is something that can be done with a distribution. There are no spouse consent requirements specifically associated with an election to roll over a distribution. If you are getting divorced, the property division can include an award to you of some or all of your spouse's IRA whether or not you are a designated beneficiary. Link to comment Share on other sites More sharing options...
ETA Consulting LLC Posted April 4, 2012 Share Posted April 4, 2012 Typically, when a plan requires the spouse (you) of the participant (your wife) to be 100% beneficiary, it is exempt from spousal consent to distributions. Therefore, your spouse would be allowed to take a distribution from the plan without your consent. This is different from designating someone else as beneficiary; it's only taking a distribution. Good Luck! CPC, QPA, QKA, TGPC, ERPA Link to comment Share on other sites More sharing options...
david rigby Posted April 4, 2012 Share Posted April 4, 2012 In case you did not notice, the important word in the above posts is "beneficiary", and the context is "death benefit". Your turn now. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
Guest J.D. Posted April 4, 2012 Share Posted April 4, 2012 In case you did not notice, the important word in the above posts is "beneficiary", and the context is "death benefit".Your turn now. Ahhhh.... Thank you. I did not take into account "beneficiary" is the "death benefit" and I am still above ground. Many thanks to everyone above for the very prompt replies. I guess I will need to track down the actual plan to see what the specific provisions are for changes. Yes, the divorce process is about to begin and <hopefully> an agreement can be reached w/o the "contested" legal costs. No kids. I feel fairly confident that the courts will treat me fairly. Link to comment Share on other sites More sharing options...
QDROphile Posted April 5, 2012 Share Posted April 5, 2012 Personally, I would not bother to track down anything related to the plan if the plan no longer holds any funds accrued for your spouse, except to find out how much was accrued and distributed. You are interested in the amount so you can take it into account when you divide property in the divorce. However, you are motivated and relatively well informed. You can amuse yourself as you wish. Link to comment Share on other sites More sharing options...
mbozek Posted April 5, 2012 Share Posted April 5, 2012 I am not a professional. I have searched as best I can for answers in these Forums.Wife's 401K (Fidelity - approx. $185K) required spousal consent to change beneficiary (me). Big law firm she worked for went bankrupt. Suddenly, all the funds are gone and I just discovered that she rolled it into a Fid. IRA with her sisters as beneficiaries; not my name. Her explanation: an email said that she had to end the 401K b/c of company bankruptcy and that I do not "deserve" anything. In Virginia - not a Community Property State. -- Wife went with partner (as legal sect'y.) to another big law firm where she now has another 401K started Approx. $6K. My understanding is that the 401K "Plan" continues even tho' company is gone with appointed P.A.'s. Q. - Would Fid. need spousal consent to do the rollover AND change beneficiary? (Possible forged signature?) Talked with atty. today (re: divorce) who said he would need to bring in a CPA. $5K retainer for atty. - Not Sure I can afford the CPA. From what I have read here and elsewhere, I feel that I know more than the divorce atty. re: 401K, ERISA, QDRO, tax consequences, etc. Any advice, suggestions, things to ask, etc. would be most appreciated. Note: I just turned 70 1/2; so, the MDR kicks in this year. Thanks! <gut wrenching stuff for me> There is no reason to spend 5k on a CPA because funds rolled over to an IRA will be included as part of the marital estate to be divided in divorce. I dont know why a lawyer would recommend retaining a CPA when the IRA assets will be listed as your wife's marital property submitted to the court. IRA assets can be rolled over tax free to former spouse without incurring the cost of a QDRO if divorce decree orders transfer. mjb Link to comment Share on other sites More sharing options...
Guest J.D. Posted April 5, 2012 Share Posted April 5, 2012 Personally, I would not bother to track down anything related to the plan if the plan no longer holds any funds accrued for your spouse, except to find out how much was accrued and distributed. You are interested in the amount so you can take it into account when you divide property in the divorce. However, you are motivated and relatively well informed. You can amuse yourself as you wish. For a bunch of pros who specialize in this stuff, your comments are FUNNY! Seriously, I appreciate the feedback AND the humor! The "stress" of all this at age 70 has <obviously> clouded my ability to see the big picture. You are correct; no need to track down anything other than the amount. Thanks! Link to comment Share on other sites More sharing options...
Guest J.D. Posted April 5, 2012 Share Posted April 5, 2012 There is no reason to spend 5k on a CPA because funds rolled over to an IRA will be included as part of the marital estate to be divided in divorce. I dont know why a lawyer would recommend retaining a CPA when the IRA assets will be listed as your wife's marital property submitted to the court. IRA assets can be rolled over tax free to former spouse without incurring the cost of a QDRO if divorce decree orders transfer. I was not clear on the $5K; that's what the divorce atty. wants as a deposit/retainer. Bringing in a CPA would be EXTRA. Reflecting on the "reason" for the atty's. need for a CPA: My question(s) were about the "tax free rollover" you mention above and the need for the dreaded MRD that will be necessary this year. OR, the double MRD before April 2013. Thanks, I now understand the process. Assuming the wife will agree to an equitable settlement, I (we) should be able to avoid considerable legal expense. The atty. said a "smooth" divorce would cost me about $2.5K of the $5K retainer. If it gets nasty, he said it can go as high as $20K. That bites! Thank you for your comments! This puts so many things into perspective for me in so many ways. Link to comment Share on other sites More sharing options...
mbozek Posted April 5, 2012 Share Posted April 5, 2012 There is no reason to spend 5k on a CPA because funds rolled over to an IRA will be included as part of the marital estate to be divided in divorce. I dont know why a lawyer would recommend retaining a CPA when the IRA assets will be listed as your wife's marital property submitted to the court. IRA assets can be rolled over tax free to former spouse without incurring the cost of a QDRO if divorce decree orders transfer. I was not clear on the $5K; that's what the divorce atty. wants as a deposit/retainer. Bringing in a CPA would be EXTRA. Reflecting on the "reason" for the atty's. need for a CPA: My question(s) were about the "tax free rollover" you mention above and the need for the dreaded MRD that will be necessary this year. OR, the double MRD before April 2013. Thanks, I now understand the process. Assuming the wife will agree to an equitable settlement, I (we) should be able to avoid considerable legal expense. The atty. said a "smooth" divorce would cost me about $2.5K of the $5K retainer. If it gets nasty, he said it can go as high as $20K. That bites! Thank you for your comments! This puts so many things into perspective for me in so many ways. no reason to bring in CPA to determine how MRD rules work. Any MRD you need to take for 2012 will be based on the value of the retirement benefits in your accounts as of 12/31/11. You can take a distribution by 12/31/12 to avoid double payment in 13. Your wife's IRA assets will be excluded from your MRD until the year after amounts are transferred to your IRA. Of course, each of you could keep your own retirement assets. See IRS Publication 590, P31, available online at irs.gov. for MRD rules. mjb Link to comment Share on other sites More sharing options...
Guest J.D. Posted April 5, 2012 Share Posted April 5, 2012 no reason to bring in CPA to determine how MRD rules work.Any MRD you need to take for 2012 will be based on the value of the retirement benefits in your accounts as of 12/31/11. You can take a distribution by 12/31/12 to avoid double payment in 13. Your wife's IRA assets will be excluded from your MRD until the year after amounts are transferred to your IRA. Of course, each of you could keep your own retirement assets. See IRS Publication 590, P31, available online at irs.gov. for MRD rules. Wow! That really helps - Thank YOU! Link to comment Share on other sites More sharing options...
BG5150 Posted April 5, 2012 Share Posted April 5, 2012 Assuming the wife will agree to an equitable settlement... This sounds like a stretch, because you quoted her as saying that you do not "deserve" anything. If she thought you didn't deserve the 401(k), why would she think you deserve part of the IRA? Best of luck, though. I'm rooting for ya! QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
Guest J.D. Posted April 7, 2012 Share Posted April 7, 2012 Assuming the wife will agree to an equitable settlement... This sounds like a stretch, because you quoted her as saying that you do not "deserve" anything. If she thought you didn't deserve the 401(k), why would she think you deserve part of the IRA? Best of luck, though. I'm rooting for ya! Thank You! I am the eternal optimist. I am also an avid backpacker. Leaving soon for a 5 day hike. Hoping things stay "calm" and that I do not return to find my clothes in the front yard Link to comment Share on other sites More sharing options...
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