Splitting a couple's Vanguard

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reisner
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Splitting a couple's Vanguard

Post by reisner »

My wife and I are having "troubles." It seems wise to divide our Vanguard accounts into equal shares. A Vanguard representative tells me that this will create no tax event. I presume I would keep my Roth, but adjust for this in the division of the taxable accounts (Total Stock, FTSE international, Intermediate Bond Index, Short Term Bond, Prime). Figuring out the amounts and percentages to keep a 60/40 balance will be tricky. Additionally, we should probably keep a Prime account jointly for common expenses--the house (no mortgage) until it is sold (if it matters, real estate has been going up here on the California Central Coast more than 1% a month), utilities, and my rent and utilities.

Also, if it matters, she has no income; I would send her half my pension and SS until a reconciliation or until a different arrangement was made in a divorce, which I don't want because she'd lose her medical and drug and dental coverage.

Any words of wisdom?
Grt2bOutdoors
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Re: Splitting a couple's Vanguard

Post by Grt2bOutdoors »

Seek independent counsel, your wife should have her own independent counsel.
Suppose you could both discuss an amenable agreement before meeting with counsel.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
hillman
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Re: Splitting a couple's Vanguard

Post by hillman »

reisner wrote:Also, if it matters, she has no income; I would send her half my pension and SS until a reconciliation or until a different arrangement was made in a divorce, which I don't want because she'd lose her medical and drug and dental coverage.

Any words of wisdom?
First, I'm sorry you're having to go through this and I hope, in the end, you and your partner find a happier place.

Second, go see an attorney. My fear, with what I quoted of our original post, is that your offer of 1/2 will become the starting point of any final negotiations. This is a very serious and trying time that will dictate how your retirement years play out. Remain civil (which it sounds like you are doing a great job of) and seek professional, experienced counsel.
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Meaty
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Re: Splitting a couple's Vanguard

Post by Meaty »

Agreed with the above. Any actions you take now will set a precedent - either good or bad. Seek an experienced attorneys advice
"Discipline equals Freedom" - Jocko Willink
Calm Man
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Re: Splitting a couple's Vanguard

Post by Calm Man »

OP, I am so sorry you have to go through with this. I would get an attorney immediately, not to be mean, but to get advice on how to protect things. Every single day that passes by until divorce is filed for gives the spouse additional benefits from your stake. Also, do not assume anything or suggest anything to her. Once in a divorce situation, it is a zero sum game. Good luck.
Last edited by Calm Man on Tue Jul 30, 2013 5:03 pm, edited 1 time in total.
island
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Re: Splitting a couple's Vanguard

Post by island »

I'm sorry to hear this and agree with the others, get an attorney or at the very least take your time, do a little research of your own and don't make any promises until you do. CA is a community property state so I would think you'd have to divide everything 50-50 including your Roth unless agreed otherwise, but I'm not an attorney. Tax free is probably desirous to both of you. Good luck and please keep us posted.
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interplanetjanet
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Re: Splitting a couple's Vanguard

Post by interplanetjanet »

I'm sorry, and I hope that for both of your sakes that you can remain civil and considerate of each other however things play out. As someone who navigated a divorce and who is largely on good terms with their ex, I can say that open, frank communication can make a difficult experience much more bearable. We were able to avoid lawyers for the most part and only consulted with them to make sure that we crossed all the t's and dotted all of the...lower case j's.

I would advise consulting counsel, but if things are not adversarial I would try to work out a plan without having two lawyers facing off. If you do start to divide things, it might be good to first sketch out a rough plan of what you are doing and have you both sign it - not as a binding commitment to how things will be divided in the future, but a plain clear statement of what is being done with both of you acknowledging it.

Good luck.

-janet
freebeer
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Re: Splitting a couple's Vanguard

Post by freebeer »

island wrote:I'm sorry to hear this and agree with the others, get an attorney or at the very least take your time, do a little research of your own and don't make any promises until you do. CA is a community property state so I would think you'd have to divide everything 50-50 including your Roth unless agreed otherwise, but I'm not an attorney. Tax free is probably desirous to both of you. Good luck and please keep us posted.
IANAL but community property doesn't necessarily imply a 50/50 division: in case one or both of you had pre-marital assets (including preexisting retirement accounts), these could be excluded from that split. Again all the more reason to get a lawyer even if the split is amicable.
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SquawkIdent
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Re: Splitting a couple's Vanguard

Post by SquawkIdent »

I am sorry you are going through this. One door closes...and another one will open...

To be blunt...stop discussing settlement items with her and seek legal counsel immediately.

Good luck.
Calm Man
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Re: Splitting a couple's Vanguard

Post by Calm Man »

interplanetjanet wrote:I'm sorry, and I hope that for both of your sakes that you can remain civil and considerate of each other however things play out. As someone who navigated a divorce and who is largely on good terms with their ex, I can say that open, frank communication can make a difficult experience much more bearable. We were able to avoid lawyers for the most part and only consulted with them to make sure that we crossed all the t's and dotted all of the...lower case j's.

I would advise consulting counsel, but if things are not adversarial I would try to work out a plan without having two lawyers facing off. If you do start to divide things, it might be good to first sketch out a rough plan of what you are doing and have you both sign it - not as a binding commitment to how things will be divided in the future, but a plain clear statement of what is being done with both of you acknowledging it.

Good luck.

I agree Janet. I suggest going to an attorney first for advice even prior to being certain you want the divorce. My second ex did before me who suggested to her that she clean out all joint accounts as I was going to file the next day and then see what happened (possession ends up being very valuable and it added to her take). I don't recommend stealing but the lawyer might give you some decent ideas. I also found that every time I met with the ex to discuss terms once I filed, I always ended up liking her eyes and offering a little more.

-janet
countdown
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Re: Splitting a couple's Vanguard

Post by countdown »

Reisner: If this is a long term marriage, I think it sounds like a rational, equitable, interim plan, and dividing the only income in half doesn't set a precedent. The characterization of property and other factors will ultimately control.
Good for you for taking the high road. You might also consider seeing a marriage counselor together, and if it is determined that the marriage is over, work with an attorney-mediator who is neutral, and will help the two of you address all legal issues.
Best of luck.
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