Home Forums Hunting & Shooting Hunter's Campfire Is there a Lawyer in the house?

My wife recently jumped my case about my IRA account(funded before marriage). She said it is vulnerable to a lawsuit and I should start a 401k plan at work and roll it over into it. Is there an ulterior motive here? If I do start a 401k and roll it over, is it now available for part of the divorce settlement? She's been so ornery lately, the boys don't even like her, so it's a concern. just post it here, don't E-mail me(she reads all those)

I'm not an investing expert by any means but I can't think of any good reason to roll an IRA into a 401K. With an IRA your investment options are unlimited while in most 401Ks your given a limited selection.

I'd suggest NOT mixing those funds. I know there are circumstances that allow you to roll a 401K into an IRA, but I don't even know if you can do it the other way around, anyway. In a divorce, you have a window of opportunity to cash out your 401K to your spouse without penalty -- just pay normal taxes on it. You can't take it out for yourself without penalty.

Of course, I'm in the middle of a divorce and am certainly the WRONG guy to take advice from, but I'd watch your ass. If there is something wrong with the particular IRA you have, roll it into a new IRA but keep it separate or half will go to her.

Disclaimer: laws vary a lot in different states. It'd be worth a $200-$300 visit to an attorney right now to get advice on how you can protect yourself and learn something about the state laws around divorce. Despite their reputation, good attorneys are worth their weight in gold.

Been there, done that.

What Muley said. Get qualified advice, not an internet site.

That advice will probably also clue you in to other things you aren't thing about.

" Despite their reputation, good attorneys are worth their weight in gold "

Ditto

MtnHtr

I'd be a lot more concerned if she has or has had you take out a big term insurance policy with her as the beneficiary. <img src="/ubbthreads/images/graemlins/grin.gif" alt="" />

Ever wonder why no "good" attorney had stepped up to this plate to take a swing? Read, where is the money! You can bet at least 1/3 of those trolling these pages are attorneys.

...Uh Oh! <img src="/ubbthreads/images/graemlins/crazy.gif" alt="" />


<img src="/ubbthreads/images/graemlins/grin.gif" alt="" /> <img src="/ubbthreads/images/graemlins/grin.gif" alt="" />

Man, you hit the nail on the head. The 'smiths at the Campfire give free advice, the writers that get paid for opinions give free opinions, the mechanics, the teachers, the engineers, the butcher, the baker, the candlestick maker.

All except lawyers.

The teacher, butcher, and engineer can give free advice, because when you try to do it yourself and screw it up, you can call them and they not only get paid to fix the original problem, but can get paid to undo the screwup
On the other hand, if you do it yourself for legal problems and get it wrong, it might be too late to call a lawyer for help. By then the Ex- wife will have all the cash anyway <img src="/ubbthreads/images/graemlins/grin.gif" alt="" />

... not to mention it will take a lawyer from SD to comment on the laws for that particular state.

sodbuster - Seek legal advice in your own state.

Many soon-to-be-divorced people are versed in the prevailing law and whether that kind of suggestion is an effort to enlarge the marital estate (and her potential share) is anybody's guess, but that kind of scheming happens every day.

I'm old school, no pre or post nups or nothing like that, if you are married everything belongs to both. With marriage taking on a new character, though, many people try to hedge their bets and many courts are accomodating. Seperate property, pre-marital property, inheritances, you name it, can be established in a variety of ways. (There are also ways to invade the seperate estate.)

In my state, if the pre-marital property is liqidated and/or commingled with marital property, it can be construed as an intention on your part to transfer the property to the marital estate. That allows the spouse to make a claim, how strong a claim is a different matter, which would need to be evaluated.

If the property in question would be construed, currently (and I don't know that it is) as seperate in your state and you don't want to see it's seperate nature endangered, then seek the proper advice for your jurisdiction, before you do anything. If it makes no difference to you, its just becomes an investment call.

Good luck, sse

Sodbuster, let me interrupt this festival of lawyer bashing to give you a little free advice---which you should understand is worth every cent you're paying for it.
Your pre-marriage IRA is your separate property, to which your wife would have no claim in a property settlement.
If you commingle it with your post-marriage retirement account, it may lose its character as separate property and become subject to her claims--not good for you.
IRAs are usually immune from creditors' claims, except taxing authorities and spouse's claims, so her argument about lawsuits doesn't make sense.
You should spend a couple of hundred bucks and consult a local lawyer so you know exacly what your rights are--but it sounds to me like she might be angling to make it easier to get her hand in your pocket.
Good luck, Steve

I personally know a very qualified tax/contract/divorce type lawyer (a good guy versus the scum of the earth type) that lurks here in the shadows.......I guess time typing a response would be time that couldn't be billed to a client....greedy SOB



Roads

Damn Good Advice.

Try MartinDaleHubble.com. Look for an "A" or "B" rated attorney in your area. Ask the question, get a definitive answer. IRAs are protected assets, but the protections vary from state to state. As an Example, O.J. Simpson lost a 30 Million dollar case and lives High on the Hog out of his retirement account.

No, its not an abuse, Congress wants everyone's retirement account held sacred so that the US governement does end up supporting any more folks than it has to. The controlling case under Federal Law is Patterson v. Shumate (US Supreme court).

For the rest of you guys, neither Doctors, nor Lawyers, nor Dentists should give free advice over the net. Doctors really need to see, feel, and evaluate someone in person in order to make a correct diagnosis. The doctor knows what is important and what isn't. The patient just knows what hurts.

Its the same with lawyers, I won't give an over the phone opinion. The client usually does not know which facts to give me. Instead, the client will tell me the facts that are important to him. But, if I can get a copy of the documents that are in dispute or that control the issue, I can give advice that is accurate.

Unlike doctors, lawyers get to tell clients that he/she is going to lose. Most often, I get this with IRS debt. Usually, I see the client after the IRS has garnished a bank account, etc. Then, its usually a FULL YEAR too late. The statute has run and I tell the client to pay the bill and/or file bankruptcy. At which point, they tell people that I am a bad lawyer.

In contrast, if you have a pain in your belly for a couple of years before you see a doctor, the doctor will say, you have Advanced Case of Cancer, but I am going to do everything in my power to help you (cause the insurance company is gonna pay the bill). At which point, the patient tells people that he has a great doctor.

Different sets of facts, get different result, and different emotions. Most lawyers I know are honest and hardworking. Some are screw-ups, and some are jerks, and some are crooks. Just like around the 24hrcf, they usually don't last long. People figure them out.

Other lawyers don't work as hard as they should. Just like in any other profession, they don't end up with enough clients to pay the bills (whcih may create whole other set of problems).

If I was really dumb, I'd list my ten least favorite attorneys for you, its an easy list to make. BUT I AIN"T THAT DUMB <img src="/ubbthreads/images/graemlins/wink.gif" alt="" />

Good luck with your IRA account, and good shooting.

BMT

I agree with Steve. I would add that I do not think you need to get legal advice. Just ask a CPA. Who does your taxes ? I do not know what you do for a living but if you are in a profession that is at a high risk of sewage consider a umbrella policy. Usualy a million dollar policy is less than 200 bucks a year. Another issue on blending this fund with your work fund is that your deductions from your pay check to your current 401k are deposited pre tax. If the other investment fund was not you have to keep them seperate. You can put them in the same company and the same fund but usually you would have two different accounts. Again I think a CPA is the person to ask about the roll over. I don't think there is any question if you blend them you will at the very least be putting those funds at risk. Go with your gut. If you have suspisions then you have already answered your own question.

Lawyers <img src="/ubbthreads/images/graemlins/confused.gif" alt="" /> <img src="/ubbthreads/images/graemlins/confused.gif" alt="" /> <img src="/ubbthreads/images/graemlins/grin.gif" alt="" />. Here's an email I got from my buddy that "lurks" (referred to above)







Good stuff



Roads

just curbstone talk here, no attorney-client relationship created--that's my story and I'm sticking to it.

I am the "not the scum of the earth" lawyer that bxroads speaks of, and have a master of laws in tax. A long time lurker and good friends with both bxroads and fletcher1856. The way you phrased your question implied that your concern was whether your IRA could be pursued by a plaintiff's lawyer; i.e., you cause a wreck and the judgement exceeds the amount of your liability insurance so the attorney attempts to get at your personal assets, including your IRA. The answer IN ALABAMA would likely be that he could turn to the IRA for satisfaction. I believe there is an exemption under federal law if you are in bankruptcy, but I am assuming you are not in bankruptcy. However, the IRA is no different than the 401k. Both could be pursued. If you are concerned about whether an IRA or 401K can be pursued by a soon to be ex-spouse (again I am referring to ALABAMA law), a judge can certainly take into account a retirement plan IRA or 401k) in making a property settlement assuming that the couple has been married a sufficient amount of time. I guess the answer would be, if you lived in Alabama, it makes no difference as whether its a 401k or an IRA as to the liability issues. However, each state has dramatically different laws and the only way you will know for sure in your state is to visit a professional who practices in your state. I will say this; a 401k is normally a more attractive retirement option because the maximum contribution limits are higher and oftentimes a 401k plan involves an employer matching contribution. You should compare what you could get from entering your employer's 401k plan to what you can do yourself with an IRA, taking into account whatever state law liability issues arise from being in one or the other, as you are advised by a tax professional licensed in your state. I hope this helps, but by all means the only way to get sound advice is to spend some 'quality time' with a local tax professional. The state you live in could very well exempt qualified retirement accounts from civil liability but you will need to find out from a lawyer in your state!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I would also like to point out that my response was made without the benefit of research or knowledge of all of the facts, and should not be taken by anyone as an absolute or as a legal opinion! The only way to get sound legal advice is to take your set of facts and issues to competent counsel. One small fact can change the outcome of an entire case and each case is different!!!