California Divorce, Our Son

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elainet7
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California Divorce, Our Son

Post by elainet7 » Fri Nov 15, 2019 4:10 pm

If our son gets divorced is his wife entitled to his ROTH IRA and or his Personal Investment Account. Both in his own name and both started way before marriage, we have contributed to both accounts during his lifetime. THANKS for any advice. They are married less than five years and I read there is marriage dissolution there

WildCat48
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Re: California Divorce, Our Son

Post by WildCat48 » Fri Nov 15, 2019 4:14 pm

Worst state to get a divorce in, he is likely screwed.

WhiteMaxima
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Re: California Divorce, Our Son

Post by WhiteMaxima » Fri Nov 15, 2019 4:19 pm

Money loss.

delamer
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Re: California Divorce, Our Son

Post by delamer » Fri Nov 15, 2019 4:21 pm

With respect, he needs an attorney in California not the opinions of people on this forum.

These settlements generally reflect the totality of the couple’s finances; they aren’t made on an account-by-account basis. So even if your son gets to keep those accounts, he may lose other joint assets.
Last edited by delamer on Fri Nov 15, 2019 4:28 pm, edited 1 time in total.

123
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Re: California Divorce, Our Son

Post by 123 » Fri Nov 15, 2019 4:26 pm

He needs an attorney. Hopefully he has records of his assets/accounts prior to the marriage (some of the balances may get to be treated as separate assets depending on how things got intermixed later on). Could depend on how much community income or joint gifts were added along the way. Messy.

He may have similar access to her assets.
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Topic Author
elainet7
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Re: California Divorce, Our Son

Post by elainet7 » Fri Nov 15, 2019 5:32 pm

they do not own property or have any other assets jointly
I was thinking of having him sell off his personal account and let me manage it in our name
most of the roth was pre marriage
his personal account is in his own name only
Thanks for the responses

7eight9
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Re: California Divorce, Our Son

Post by 7eight9 » Fri Nov 15, 2019 5:38 pm

elainet7 wrote:
Fri Nov 15, 2019 5:32 pm
they do not own property or have any other assets jointly
I was thinking of having him sell off his personal account and let me manage it in our name
most of the roth was pre marriage
his personal account is in his own name only
Thanks for the responses
In California, hiding assets during a divorce is both unethical and illegal. When couples divorce in California, they are required to file forms with the court that truthfully disclose all of their assets including bank accounts, real estate and income. If one spouse tries to hide assets by giving false, incomplete or misleading information on official court documents during divorce proceedings, there can be serious consequences. In California, those consequences include being held in contempt of court or even charged with perjury.
https://info.legalzoom.com/hiding-asset ... 25379.html
I guess it all could be much worse. | They could be warming up my hearse.

Topic Author
elainet7
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Re: California Divorce, Our Son

Post by elainet7 » Fri Nov 15, 2019 5:41 pm

The Roth should not be a problem as it was not funded by marital income but funded by us, his parents
he is allowed to make GIFTS up to a certain amount legally
the older we get, the more we hear of divorces

GmanJeff
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Re: California Divorce, Our Son

Post by GmanJeff » Fri Nov 15, 2019 5:45 pm

You have received sound advice - a competent California attorney who specializes in divorce cases is where you (or, more to the point, your son) should be obtaining counsel. Not from an Internet forum where you're seeking state-specific legal advice from strangers, who may be well-intentioned but not necessarily qualified to dispense it.
Last edited by GmanJeff on Fri Nov 15, 2019 5:49 pm, edited 3 times in total.

HomeStretch
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Re: California Divorce, Our Son

Post by HomeStretch » Fri Nov 15, 2019 5:45 pm

He shouldn’t do anything with finances (including transferring funds to you) until he speaks with an attorney. A transfer before or during a divorce proceeding might be unfavorably viewed by the spouse’s attorney or the judge.

An amicable split of the finances with the aid of a mediator may cost the couple a lot less in fees/assets.
Last edited by HomeStretch on Fri Nov 15, 2019 5:47 pm, edited 1 time in total.

sls239
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Re: California Divorce, Our Son

Post by sls239 » Fri Nov 15, 2019 5:46 pm

Absolutely this is a matter of specific state laws.

It may well be that contributions made to an account before marriage are considered separate property but earnings on the account during the marriage could be considered marital property.

stan1
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Re: California Divorce, Our Son

Post by stan1 » Fri Nov 15, 2019 5:49 pm

HomeStretch wrote:
Fri Nov 15, 2019 5:45 pm
He shouldn’t do anything with finances (including transferring funds to you) until he speaks with an attorney. A transfer before or during a divorce proceeding might be unfavorably viewed by the spouse’s attorney or the judge.

An amicable split of the finances with the aid of a mediator may cost the couple a lot less in fees/assets.
+1. Amicable split with a mediator will cost a lot less and hopefully will help them both move on faster with their lives. The attorneys will be happy to fight for them both out of principal and billable hours even if there's nothing to fight over.

anonsdca
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Re: California Divorce, Our Son

Post by anonsdca » Fri Nov 15, 2019 6:06 pm

elainet7 wrote:
Fri Nov 15, 2019 4:10 pm
If our son gets divorced is his wife entitled to his ROTH IRA and or his Personal Investment Account. Both in his own name and both started way before marriage, we have contributed to both accounts during his lifetime. THANKS for any advice. They are married less than five years and I read there is marriage dissolution there
My experience - No attorney, went to the Family court, got the package (cost $250), filled it all out, filing fees of another $100 or so. Here is what we did. We lived in CA.

1) We each kept our own 401ks (we did not have any IRAs at the time).
2) We each kept a car. We had two, both were paid off, she chose which one she wanted.
3) We sold our house and split the profit 50/50
4) From the house profit, we paid any credit card/loans off. Her's, His, Both. We didn't have much
5) Married > 5 years

No problems with the court. It was approved and we moved on. It can be done.

Getting an attorney can be a plus and a nightmare. They have to decide if they want to do that. If one has an attorney, the other must have one. If they can do it themselves and be fair about it, I would go that route.

Personally, I think it would be selfish of anyone trying to get a "personal investment account". That should be divided 50/50 in my opinion, no matter when it was started. It is likely it grew due to the marriage.

My personal take on this.

hicabob
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Re: California Divorce, Our Son

Post by hicabob » Fri Nov 15, 2019 6:10 pm

stan1 wrote:
Fri Nov 15, 2019 5:49 pm
HomeStretch wrote:
Fri Nov 15, 2019 5:45 pm
He shouldn’t do anything with finances (including transferring funds to you) until he speaks with an attorney. A transfer before or during a divorce proceeding might be unfavorably viewed by the spouse’s attorney or the judge.

An amicable split of the finances with the aid of a mediator may cost the couple a lot less in fees/assets.
+1. Amicable split with a mediator will cost a lot less and hopefully will help them both move on faster with their lives. The attorneys will be happy to fight for them both out of principal and billable hours even if there's nothing to fight over.
Yup - that's the way to do it if both parties are on speaking terms and honest. Saves lots of $$$ and not as unpleasant.

Grt2bOutdoors
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Re: California Divorce, Our Son

Post by Grt2bOutdoors » Fri Nov 15, 2019 6:35 pm

elainet7 wrote:
Fri Nov 15, 2019 5:41 pm
The Roth should not be a problem as it was not funded by marital income but funded by us, his parents
he is allowed to make GIFTS up to a certain amount legally
the older we get, the more we hear of divorces
That's not correct. Individual Retirement Arrangements are funded by account owner's earned income, not by gifts. That is the IRS definition of how IRA's are funded. Your son ought to get competent legal advice from an experienced attorney. IMO, I believe the court will not accept your version of it, but that is what the attorney consultation is for.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Trader Joe
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Re: California Divorce, Our Son

Post by Trader Joe » Fri Nov 15, 2019 6:39 pm

elainet7 wrote:
Fri Nov 15, 2019 4:10 pm
If our son gets divorced is his wife entitled to his ROTH IRA and or his Personal Investment Account. Both in his own name and both started way before marriage, we have contributed to both accounts during his lifetime. THANKS for any advice. They are married less than five years and I read there is marriage dissolution there
Yes, more likely than not. It is always better for your son to accept the divorce judgement and move on with life as quickly as possible.

And then also learn from the entire experience.

aristotelian
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Re: California Divorce, Our Son

Post by aristotelian » Fri Nov 15, 2019 7:14 pm

elainet7 wrote:
Fri Nov 15, 2019 5:41 pm
The Roth should not be a problem as it was not funded by marital income but funded by us, his parents
he is allowed to make GIFTS up to a certain amount legally
the older we get, the more we hear of divorces
Money is fungible. Any money you gave him for this or that purpose freed up money for them to do something else. Not sure about CA but courts can definitely chop up retirement accounts, which makes sense assuming they were both planning to live off those funds in retirement. I would encourage doing some kind of arbitration to keep it out of the courts and save legal costs for everyone involved. If they come up with a settlement that works for everyone the law becomes irrelevant.

BlueCable
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Re: California Divorce, Our Son

Post by BlueCable » Fri Nov 15, 2019 7:21 pm

elainet7 wrote:
Fri Nov 15, 2019 5:41 pm
the older we get, the more we hear of divorces
Is a divorce actually imminent, or are you just wanting to understand how to best gift money if a divorce happens at some point in the indefinite future?

The rate of marriages ending in divorce actually peaked in the late 70s/early 80s and has been on a gradual decline since. An arbitrary newlywed Millennial is less likely to get divorced than his Boomer parents.
Last edited by BlueCable on Fri Nov 15, 2019 10:59 pm, edited 1 time in total.

Topic Author
elainet7
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Re: California Divorce, Our Son

Post by elainet7 » Fri Nov 15, 2019 8:43 pm

divorce is not imminent; just thinking if I should continue helping him grow his roth ira and personal investment account
as a parent you think about these consequences
it would kill me if the wife got any of his assets since most were there prior to marriage

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Steelersfan
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Re: California Divorce, Our Son

Post by Steelersfan » Fri Nov 15, 2019 8:46 pm

elainet7 wrote:
Fri Nov 15, 2019 5:41 pm
The Roth should not be a problem as it was not funded by marital income but funded by us, his parents
he is allowed to make GIFTS up to a certain amount legally
the older we get, the more we hear of divorces
California is a community property state. Don't be so sure gifts made during a marriage are not community property, and may be subject to division upon divorce.

Have him consult with an attorney before he or you do anything)

Yukon
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Re: California Divorce, Our Son

Post by Yukon » Fri Nov 15, 2019 8:50 pm

elainet7 wrote:
Fri Nov 15, 2019 8:43 pm
divorce is not imminent; just thinking if I should continue helping him grow his roth ira and personal investment account
as a parent you think about these consequences
it would kill me if the wife got any of his assets since most were there prior to marriage
Do you not love you daughter in law? Don't gift the money if you care where it ends up.
Don't Work Forever.

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CAsage
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Re: California Divorce, Our Son

Post by CAsage » Fri Nov 15, 2019 8:52 pm

From my friends' divorces in CA... it's all about traceability, source of funds, and comingling. If anyone has an account before marriage, and does not add to it with earned income, then that account and it's earnings remain sole. Earnings in a community property are joint - they belong to both. If you mix up the funds, or add to an account, then it becomes comingled and joint. I usually suggest to anyone getting married in CA who has money to just park it somewhere in a separate bank or brokerage, and don't mingle! If you want to gift your son more money, keep that money clean from now on.
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Grt2bOutdoors
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Re: California Divorce, Our Son

Post by Grt2bOutdoors » Fri Nov 15, 2019 9:09 pm

elainet7 wrote:
Fri Nov 15, 2019 8:43 pm
divorce is not imminent; just thinking if I should continue helping him grow his roth ira and personal investment account
as a parent you think about these consequences
it would kill me if the wife got any of his assets since most were there prior to marriage
This is not a finance issue, it appears from your statement above you have issues with your daughter in law or the marriage itself. This is a sensitive topic but have you spoken to your son about this? Perhaps instead of you providing any future gives, you make a provision in your will to leave monies in trust for your son only? You may want to consult an estates attorney.
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Re: California Divorce, Our Son

Post by RickBoglehead » Fri Nov 15, 2019 11:31 pm

elainet7 wrote:
Fri Nov 15, 2019 8:43 pm
divorce is not imminent; just thinking if I should continue helping him grow his roth ira and personal investment account
as a parent you think about these consequences
it would kill me if the wife got any of his assets since most were there prior to marriage
Interesting statement.
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TropikThunder
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Re: California Divorce, Our Son

Post by TropikThunder » Sat Nov 16, 2019 12:37 am

RickBoglehead wrote:
Fri Nov 15, 2019 11:31 pm
elainet7 wrote:
Fri Nov 15, 2019 8:43 pm
divorce is not imminent; just thinking if I should continue helping him grow his roth ira and personal investment account
as a parent you think about these consequences
it would kill me if the wife got any of his assets since most were there prior to marriage
Interesting statement.
I wonder if there's a companion thread somewhere with a wife wondering if her MIL hates her. :|

I agree though, there's unlikely to be any truly helpful advice here other than talk to a lawyer. One tends to be able to keep what one brought into the marriage, but it can be very difficult to keep separate property separate in a community property state if contributions continue during the marriage. If he had opened a second Roth IRA to accept contributions after they got married, it would be easier to show the pre-marriage Roth was discrete separate property but it takes a discouraging level of cynicism to have that foresight.

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Re: California Divorce, Our Son

Post by LilyFleur » Sat Nov 16, 2019 1:16 am

WildCat48 wrote:
Fri Nov 15, 2019 4:14 pm
Worst state to get a divorce in, he is likely screwed.
oh for goodness sakes, let's not get the OP more worried than is necessary.

If you have documentation of the money you have put into his accounts before the marriage, and if he can come up with statements of the accounts (before the marriage) showing what he brought into the marriage, he mostly likely will get that back, as will whatever she brought into the marriage. Time is on his side; he hasn't been married that long, and most likely it's just a matter of downloading the statements right before the date of the marriage.

It just needs to be documented.

Plano
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Re: California Divorce, Our Son

Post by Plano » Sat Nov 16, 2019 5:55 am

Grt2bOutdoors wrote:
Fri Nov 15, 2019 6:35 pm
elainet7 wrote:
Fri Nov 15, 2019 5:41 pm
The Roth should not be a problem as it was not funded by marital income but funded by us, his parents
he is allowed to make GIFTS up to a certain amount legally
the older we get, the more we hear of divorces
That's not correct. Individual Retirement Arrangements are funded by account owner's earned income, not by gifts. That is the IRS definition of how IRA's are funded. Your son ought to get competent legal advice from an experienced attorney. IMO, I believe the court will not accept your version of it, but that is what the attorney consultation is for.
+1
If your intent is to give to your son only — not any past, present, or future spouses — then indirectly contributing to his retirement savings accounts is the wrong way to go about it.

Consult an estate planning attorney and inform them that your son lives in CA, a community property state. Have them structure your giving in such a way that it will clearly be deemed inheritance / separate property in the event of a divorce.

If you do not already have a trust, starting from scratch should cost no more than $5k even in LA or SF. This is money well spent, IMO — a pittance compared to your son’s costs later, if he does indeed get a divorce.

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Re: California Divorce, Our Son

Post by oldcomputerguy » Sat Nov 16, 2019 7:11 am

This topic has run its course and has been locked. The questions raised here can have serious consequences to the son, and so should be taken to a California attorney.
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Re: California Divorce, Our Son

Post by LadyGeek » Sat Nov 16, 2019 9:40 am

To clarify, the question has been answered. There's no added value to continue the discussion (topic exhausted). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
(Topic remains locked.)
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