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Can I make my husband sign over his retirement account to me?

Can I make my husband sign over his retirement account to me?

Full question:

My husband took my retirement rollover check and spent the money on his business and he is loosing the business. He has a retirement account that he can get this December. Can i legally make him sign his retirement over to me and if so do i have to file for divorce to do this?

Category: Divorce
Date: 04/07/2025
State: Tennessee

Answer:

The answer to your question depends on the specific circumstances. If you have a promissory note or agreement indicating that your husband was supposed to repay the rollover check, you might pursue a breach of contract claim. If there is no such agreement, his retirement account may be subject to division in a divorce.

A Qualified Domestic Relations Order (QDRO) is a legal order in a divorce case that allows for the division of retirement benefits. Under the Employee Retirement Income Security Act (ERISA), a QDRO recognizes a spouse's right to receive a portion of retirement benefits. The pension plan administrator is responsible for determining whether an order qualifies as a QDRO.

In general, retirement benefits accrued during the marriage are considered community property and can be divided in a divorce. The court can either award a spouse a percentage of the retirement benefits or reserve the right to award benefits when they are paid.

There are two common methods for dividing pension plans: reservation of jurisdiction and cash-out. With reservation of jurisdiction, the court orders that the non-working spouse receives a percentage of the pension upon retirement. For example, if the husband contributed for twenty years and ten of those years were during the marriage, the wife would receive half of that percentage upon retirement. Cash-out involves determining the present value of the pension plan and compensating the non-working spouse with other community property.

Preparing a QDRO can be complex and may require assistance from professionals who specialize in this area. It’s advisable to consult with a legal expert to understand your options and the best way to proceed.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Why do I need spousal consent for a 401k rollover?

Spousal consent is often required for a 401(k) rollover to ensure that both spouses are aware of and agree to the financial decisions being made. This is especially important because retirement accounts can be considered marital property. The law aims to protect the non-participating spouse's interests in the account. Without consent, the plan may not allow the rollover, and the non-participating spouse could lose their rights to a share of the account in the event of divorce.

Can a company keep your retirement money?

In general, a company cannot keep your retirement money without a valid reason. If you leave a job, you are entitled to your vested benefits. However, if you have an outstanding loan or if you violate the plan's rules, there could be consequences. Additionally, if you do not claim your benefits, some plans may have provisions for escheatment, where unclaimed funds revert to the company. Always review your plan documents for specific terms.

Are there any negatives to rolling over a 401k?

Yes, there can be negatives to rolling over a 401(k). You may lose certain benefits, such as loan options or lower fees associated with your current plan. Additionally, if you roll over to an IRA, you may face different withdrawal rules and tax implications. It's essential to compare your current plan's features with the new account to ensure it aligns with your financial goals.

Can money be taken out of a rollover IRA?

Yes, you can take money out of a rollover IRA, but there may be tax implications and penalties depending on your age and the reason for the withdrawal. If you are under 59½, you may incur a 10% early withdrawal penalty in addition to income tax on the amount withdrawn. It's advisable to consult a tax professional before making withdrawals to understand the consequences.

Can you lose money in a rollover?

Yes, you can lose money in a rollover if the investments within the new account decline in value. While the rollover itself does not cause a loss, the performance of the investments you choose afterward can impact your overall balance. It's important to carefully consider your investment strategy and options when rolling over funds.

Can lawsuits go after retirement accounts?

In certain circumstances, retirement accounts can be subject to lawsuits. Generally, ERISA protects qualified retirement plans from creditors, but exceptions exist, such as for divorce settlements or certain tax debts. A court may issue a Qualified Domestic Relations Order (QDRO) to divide retirement benefits during a divorce. Always consult a legal expert to understand how your specific situation may be affected.