How do I keep pre-marital 401k separate?

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Topic Author
yosemite_mountain
Posts: 465
Joined: Tue Oct 02, 2018 8:44 pm

Re: How do I keep pre-marital 401k separate?

Post by yosemite_mountain »

BirdFood wrote: Sat May 11, 2024 11:50 pm
yosemite_mountain wrote: Sat May 11, 2024 11:49 pm
BirdFood wrote: Sat May 11, 2024 11:29 pm
I can't conceive of any way for you to reliably achieve this goal without a prenup. Edited to add: At the very least, you should speak to a lawyer who takes your goal seriously, rather than trying any self-help idea like saving 401K statements. The statements might work, but they might be utterly meaningless.

I spoke with a family law attorney in California who said:
"In California, property owned separately before marriage and any appreciation/dividends from that property remain separate if you don't commingle it, such as separate brokerage you never add contributions to post marriage”...


That's why I came here to ask how to keep the 401k separate.
Why not ask a lawyer that question?
The family law attorney mentioned that the 401k split is up to the QDRO attorney upon dissolution. Maybe I should also talk to a QDRO attorney...
dorster
Posts: 322
Joined: Tue Aug 15, 2017 4:20 pm

Re: Cash out 401k? (Getting married)

Post by dorster »

yosemite_mountain wrote: Sat May 11, 2024 10:19 pm
yosemite_mountain wrote: Fri May 10, 2024 10:37 pm Future spouse will be investing a lot of money overseas in their country of birth (They moved to the US as an adult, so they are more familiar with investments in their country of origin).

If we got a divorce, there is no way to track their investments overseas; so the community property to be split in half would be coming from my investments.
I am unable to edit my original post anymore unfortunately ... not sure if a moderator made it so that I'm not able to.
I'd try to get this into the original post as it puts your whole query in a different light and (I believe) will change the advice you receive. I've never done it but I believe you could report your post and bring it to the attention of a moderator who may be able to help you edit your first post (or do it on your behalf).

Best of luck and congratulations on your engagement!
er999
Posts: 1471
Joined: Wed Nov 05, 2008 10:00 am

Re: How do I keep pre-marital 401k separate?

Post by er999 »

If you get divorced it will be very costly both financially and emotionally so better to focus on prevention. I’d ask yourself if you are thinking about paying the 10% penalty to withdrawal from your 401k early are you sure this is the right match? (don’t need to reply on here).

Hopefully this is just a manifestation of the planning and research tendencies many on bogleheads have and not a sign of any red flags. At 34 or 35 years old you still have many future options open to you. Way easier to split up before marriage than after. Also good to have any uncomfortable conversations before than after getting married such as finances, in laws, whether to move back to his country at retirement, etc.
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just frank
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Location: Philly Metro

Re: How do I keep pre-marital 401k separate?

Post by just frank »

If your future spouse invested their assets in the US (they could learn), would you then still be concerned about finances in a future hypothetical divorce?

Or would you then be comfortable with community assets.

It seems a smaller ask to suggest the spouse invest in the US (even the same brokerage in a separate account) rather than do a prenup and all this other stuff...

I'm just hoping you two get to a happy agreement, OP.
BirdFood
Posts: 254
Joined: Sat Mar 23, 2024 12:15 pm

Re: How do I keep pre-marital 401k separate?

Post by BirdFood »

yosemite_mountain wrote: Sun May 12, 2024 9:12 am
BirdFood wrote: Sat May 11, 2024 11:50 pm
yosemite_mountain wrote: Sat May 11, 2024 11:49 pm
BirdFood wrote: Sat May 11, 2024 11:29 pm
I can't conceive of any way for you to reliably achieve this goal without a prenup. Edited to add: At the very least, you should speak to a lawyer who takes your goal seriously, rather than trying any self-help idea like saving 401K statements. The statements might work, but they might be utterly meaningless.

I spoke with a family law attorney in California who said:
"In California, property owned separately before marriage and any appreciation/dividends from that property remain separate if you don't commingle it, such as separate brokerage you never add contributions to post marriage”...


That's why I came here to ask how to keep the 401k separate.
Why not ask a lawyer that question?
The family law attorney mentioned that the 401k split is up to the QDRO attorney upon dissolution. Maybe I should also talk to a QDRO attorney...
Maybe. And did you say the word “prenup” to the family law attorney? It sounds like he just told you what the default situation is.
nonnie
Posts: 3061
Joined: Thu Mar 13, 2008 8:05 pm

Re: How do I keep pre-marital 401k separate?

Post by nonnie »

yosemite_mountain wrote: Sun May 12, 2024 9:12 am
BirdFood wrote: Sat May 11, 2024 11:50 pm
yosemite_mountain wrote: Sat May 11, 2024 11:49 pm
BirdFood wrote: Sat May 11, 2024 11:29 pm
I can't conceive of any way for you to reliably achieve this goal without a prenup. Edited to add: At the very least, you should speak to a lawyer who takes your goal seriously, rather than trying any self-help idea like saving 401K statements. The statements might work, but they might be utterly meaningless.

I spoke with a family law attorney in California who said:
"In California, property owned separately before marriage and any appreciation/dividends from that property remain separate if you don't commingle it, such as separate brokerage you never add contributions to post marriage”...


That's why I came here to ask how to keep the 401k separate.
Why not ask a lawyer that question?
The family law attorney mentioned that the 401k split is up to the QDRO attorney upon dissolution. Maybe I should also talk to a QDRO attorney...
There's nothing magic about a "QDRO" attorney. You and your spouse must agree on how the assets will be split. If you cannot agree, a judge will decide for you. The attorney drafts the QUADRO order based on the settlement agreement. It can be your attorney, spouse's attorney (you should be represented by an attorney capable of doing this) or you can hire an additional attorney.

When you asked for attorney suggestions, I PMd you the name of a California law firm well qualified to answer your questions. Have you reviewed this?

https://www.divorcenet.com/states/calif ... _questions

EDIT an actuary or other financial professional is often consulted when negotiating or deciding on division of assets and drafting a QUADRO.
Last edited by nonnie on Sun May 12, 2024 11:33 am, edited 1 time in total.
Coastfical
Posts: 63
Joined: Thu Jun 08, 2023 10:52 am

Re: How do I keep pre-marital 401k separate?

Post by Coastfical »

just frank wrote: Sun May 12, 2024 10:19 am If your future spouse invested their assets in the US (they could learn), would you then still be concerned about finances in a future hypothetical divorce?

Or would you then be comfortable with community assets.

It seems a smaller ask to suggest the spouse invest in the US (even the same brokerage in a separate account) rather than do a prenup and all this other stuff...

I'm just hoping you two get to a happy agreement, OP.
OP and fiancée really need to have the “money” talk sooner than later. Regardless of the law, do they consider post marriage assets “shared” and commingled? Or will it all be managed completely separately in separate accounts? Will they own property together? Even though he doesn’t have as much now - if salary is higher that number may completely switch over in a few years (and not sure about things like RSUs or other employment opportunities). How will they make decisions about investments, asset allocation, risk tolerance? What happens if she is risk adverse and he wants 100% equities.

How do you feel about retirement - do you want to retire early, does he?

Money is one of the biggest stress points of relationships - it can cause power struggles and distrust, and it doesn’t get easier over time.
Topic Author
yosemite_mountain
Posts: 465
Joined: Tue Oct 02, 2018 8:44 pm

Re: How do I keep pre-marital 401k separate?

Post by yosemite_mountain »

Coastfical wrote: Sun May 12, 2024 11:09 am

OP and fiancée really need to have the “money” talk sooner than later. Regardless of the law, do they consider post marriage assets “shared” and commingled? Or will it all be managed completely separately in separate accounts? Will they own property together? Even though he doesn’t have as much now - if salary is higher that number may completely switch over in a few years (and not sure about things like RSUs or other employment opportunities). How will they make decisions about investments, asset allocation, risk tolerance? What happens if she is risk adverse and he wants 100% equities.

How do you feel about retirement - do you want to retire early, does he?

Money is one of the biggest stress points of relationships - it can cause power struggles and distrust, and it doesn’t get easier over time.
We had not had the money talk yet but I think its time.
Topic Author
yosemite_mountain
Posts: 465
Joined: Tue Oct 02, 2018 8:44 pm

Re: How do I keep pre-marital 401k separate?

Post by yosemite_mountain »

just frank wrote: Sun May 12, 2024 10:19 am If your future spouse invested their assets in the US (they could learn), would you then still be concerned about finances in a future hypothetical divorce?
Right, I'd be more comfortable if future spouse invested their assets in the US
Topic Author
yosemite_mountain
Posts: 465
Joined: Tue Oct 02, 2018 8:44 pm

Re: How do I keep pre-marital 401k separate?

Post by yosemite_mountain »

nonnie wrote: Sun May 12, 2024 11:03 am
yosemite_mountain wrote: Sun May 12, 2024 9:12 am
BirdFood wrote: Sat May 11, 2024 11:50 pm
yosemite_mountain wrote: Sat May 11, 2024 11:49 pm
BirdFood wrote: Sat May 11, 2024 11:29 pm
I can't conceive of any way for you to reliably achieve this goal without a prenup. Edited to add: At the very least, you should speak to a lawyer who takes your goal seriously, rather than trying any self-help idea like saving 401K statements. The statements might work, but they might be utterly meaningless.

I spoke with a family law attorney in California who said:
"In California, property owned separately before marriage and any appreciation/dividends from that property remain separate if you don't commingle it, such as separate brokerage you never add contributions to post marriage”...


That's why I came here to ask how to keep the 401k separate.
Why not ask a lawyer that question?
The family law attorney mentioned that the 401k split is up to the QDRO attorney upon dissolution. Maybe I should also talk to a QDRO attorney...
There's nothing magic about a "QDRO" attorney. You and your spouse must agree on how the assets will be split. If you cannot agree, a judge will decide for you. The attorney drafts the QUADRO order based on the settlement agreement. It can be your attorney, spouse's attorney (you should be represented by an attorney capable of doing this) or you can hire an additional attorney.

When you asked for attorney suggestions, I PMd you the name of a California law firm well qualified to answer your questions. Have you reviewed this?

https://www.divorcenet.com/states/calif ... _questions

EDIT an actuary or other financial professional is often consulted when negotiating or deciding on division of assets and drafting a QUADRO.
I just spoke to a QDRO attorney who said: "In CA, the dividends+capital gains earned on a pre-marital 401k during the marriage remain separate property in case of a divorce"
BirdFood
Posts: 254
Joined: Sat Mar 23, 2024 12:15 pm

Re: How do I keep pre-marital 401k separate?

Post by BirdFood »

yosemite_mountain wrote: Tue May 14, 2024 6:28 pm I just spoke to a QDRO attorney who said: "In CA, the dividends+capital gains earned on a pre-marital 401k during the marriage remain separate property in case of a divorce"
Did they give you advice on appropriate record-keeping to determine what in the end counts as premarital and what does not? Because I assume that by default, what you add to the 401K during the marriage is community property.
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