Guest Chelsi Posted April 10, 2010 Share Posted April 10, 2010 In calculating the alternate payee's share, is non-marital money (money the participant invested in the plan before the marriage) deducted off the top before the 50% split is done, or is this money deducted after the 50% split is done (from the AP's 50% share)? For example: The total value of the participant's acocunt is $200,000. The particpant's pre-marital amount is $10,000. Is the alternate payee's share figured 1) $200,000 minus $10,000 equals $190,000. 50% of $190,000 equals $95,000; or 2) 50% of $200,000 equals $100,000. $100,000 minus $10,000 equals $90,000. #1 favors the alternate payee and #2 favors the participant. Is there actually a correct way to calculate this? If so, can someone make sense of this mathematically for me? Thank you in advance! This board has some really helpful and knowledgable people. Link to comment Share on other sites More sharing options...
J Simmons Posted April 10, 2010 Share Posted April 10, 2010 I think from an equitable and marital/community property law perspective, #1 would be favored over #2. But what does the QDRO say? If it says, as is common, that the ex-spouse gets 50% of what accrued during marriage, that is #1. However, a QDRO could be drafted in a way to give the #2 result--unless that $10,000 has already been awarded to another AP per a prior QDRO. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation. Link to comment Share on other sites More sharing options...
Guest Chelsi Posted April 10, 2010 Share Posted April 10, 2010 The divorce agreement says the ex-spouse gets 50% of the amount that accrued during the marriage. So, that would be #1 in which the pre-marital amount is first deducted from the whole, and then the 50% is figured? Link to comment Share on other sites More sharing options...
J Simmons Posted April 10, 2010 Share Posted April 10, 2010 The divorce agreement says the ex-spouse gets 50% of the amount that accrued during the marriage. So, that would be #1 in which the pre-marital amount is first deducted from the whole, and then the 50% is figured? That's how I understand that. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation. Link to comment Share on other sites More sharing options...
K2retire Posted April 11, 2010 Share Posted April 11, 2010 And keep in mind that there is no requirement that it be a 50/50 split at all. I saw one recently where the participant didn't care for the invetment choices in the 401(k), so the QDRO gave his ex the entire 401(k) and he kept more of the other assets to offset it. Link to comment Share on other sites More sharing options...
R. Butler Posted April 26, 2010 Share Posted April 26, 2010 Are you a tpa? The DRO really needs to give you precise dates. We wouldn't recommend accepting a DRO that says "amount accrued during marriage" Link to comment Share on other sites More sharing options...
Guest Chelsi Posted April 29, 2010 Share Posted April 29, 2010 Are you a tpa? The DRO really needs to give you precise dates. We wouldn't recommend accepting a DRO that says "amount accrued during marriage" The DRO stated the distribution as the amount that accumulated between date of marriage (date 1) and asset cut off date (date 2), with losses/gains to distribution date.. The Plan rejected this language anyway. What's a tpa? Link to comment Share on other sites More sharing options...
david rigby Posted April 29, 2010 Share Posted April 29, 2010 What's a tpa? Third Party Administrator 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...
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