lizatola

I keep going through the financials and scenarios that would happen should my marriage actually end soon. My AH has said that he wants to keep his 401K and that I can have the house and the savings. Number wise, these things are almost equally valued, unless you count the fact that the 401K is retirement funds and that he can't touch them for another 15 years or so.

We live in a community property state and my understanding of things is that everything gets split 50/50. What I'm wondering is: can the couple arrange to split things amicably outside the court system and have it approved if they both agree to it? Or, does the court system rule and you have to do what they tell you to, even if the spouses wanted something different?

We also live in a no fault divorce state, so his 'issues' wouldn't be taken into account in the case of child support or alimony. Honestly, I would only go for child support because I've heard horror stories from friends about how screwed they got by the judges here when looking for spousal support. One friend of mine was asked, by the judge, to undergo $5000 worth of testing so they could assess her mental state, her physical wellness, her work abilities, etc so that he could make a better recommendation for support. She can't afford to pay for the testing so she dropped the request for spousal support. I will be contacting a local lawyer next week, but I wanted to hear your stories and maybe what questions I should be prepared to ask.

LaTeeDa

I think, in most cases, the court would rather you figure out how you want things split. As far as I know, the court only gets involved when two people cannot come to an agreement. Also, in my state, there are guideline amounts for child support. If you deviate from the guideline, you have to justify it. I know nothing about spousal support except that it usually depends on how long you have been married.

All good questions for an attorney.

P.S. If you give up the retirement, then you have nothing when you do retire. Unless, of course, you save your own between now and then. If it were me, I'd think twice about trading the house for the retirement. Especially with the housing market the way it is.

L

dollydo

A marital settlement agreement can be worked out between the attorneys. Divorce is nothing but a court order that outlines the financial split of the marital assets and the custody and financial support of the minor children. If the participants in the divorce agree to the terms of the marital settlement agreement, in 99% of the cases the judge just approves the court order
and the divorce is granted. The bottom line is that the court really doesn't care who gets what, as long as the couple are in agreement.

lizatola

I have about 50K put away for my own retirement and there is about 100K equity in the house. I can sell the house in a year or 2, see if the equity improves a small amount, and then start a Roth IRA to catch up on some retirement monies. I was a stockbroker by trade and have experience in investing. If I was upside down on the house(or in danger of being there), then I'd probably be more willing to let it go but it's got great resale potential and we live in a very desirable area tucked into the desert hills.

We have no debt other than a few simple credit cards that get paid off monthly so the only debt that we have together is the house. Our savings would be enough for my son and I to survive about 2 years before I'd have to get a full time job or sell the house or both, as long as I'm frugal and spend and invest wisely.

Honestly, my biggest problem with it will be that I won't have health/dental insurance. I have a few health challenges that I need monitored and I have no idea how much that would cost on my own. In the meantime, I can figure out which job skills I'd like to further and improve and start networking with friends and acquaintances, putting feelers out there for job referrals, etc.

LifeRecovery

I live in a neighboring state with similar laws.

Our divorce was simple w/out kids involved. We brought it all to a lawyer and divided it out how we saw best. For example I was the only one who had a significant amount of money in a retirement fund (because his family is wealthy). We kept our separate retirements and did the house as I bought it out.

The legal end of the divorce was fairly easy for me and it was fast and straightforward. I was a hot mess emotionally however and had to learn how to keep those two pieces separate for a time.

bonami

Check into the insurance laws in your state, there may be some kind of spousal continuation available which means you and your son could continue to be covered under your husband's employer's insurance plan for a specific period of time (like 2 years) in the event of a divorce. You have separate coverage but it's at the group rate which would most likely be better than what you could find on your own.

onlythetruth

You really, really need to get a lawyer in your state who knows the laws specific to your jurisdiction. Divorce laws vary a lot from state to state. Seriously...I'm a lawyer, and honestly one of the worst things in the world is to see people make mistakes because they try to avoid the cost of a legal consultation. PLEASE don't do this to yourself when so much is at stake.

With that said, one thing you might want to consider is that retirement assets such as 401(k)s aren't really worth their face value--they are worth their face value MINUS the taxes to be paid upon withdrawal. So a $100,000 house and a $100,000 IRA (unless it's a Roth) are not really an even trade.

Of course this works in your favor here. But it's something to consider.

Kiana

In AZ child support is determined by the court based on several factors, and if a spouse agrees to provide spousal support then the court approves it without any hassles.

Now would be the time to get an individual health insurance policy, if medically possible, for many reasons. You can go to places like BCBS online to see what you might pay monthly. When I was in great health without any medical issues, with a high deductible, mine was over $400 per month and that was a bit ago.

It's a 50/50 state but often it doesn't end up split that way here.

Housing markets can tank overnight. It was better to liquidate/sell/cash out and have the assets in hand from the house equity, and rent a place for a while until the dust settled. Hanging onto a cash-eating property like a house, vehicles, or any property, is usually not recommended. Our best laid plans may sound good to us initially but, along with legal advice you'll be getting soon, the advice of a couple of different professional financial planners really is worth its weight in gold.

quillan68

In many states the family courts provide lots of useful information on the web and also provide free consultations for those who qualify. The bottom line is that the courts much prefer people to resolve issues on their own, and/or with the help of a mediator. If you can reach agreement amicably on how to divvy up assets, it can then be presented to the court so that it is official and enforceable (that protects both parties). But you should consult an attorney so you know about any wrinkles or nuances in your state and how to best go about the dissolution process in your state. If a couple can split up property amicably, it saves a ton of money. My STBXAW spent over 25 grand on a lawyer in just a couple months, but that's because she doesn't trust anyone and is really irresponsible with money. I spent about two thousand for the entire divorce, which is probably a little low, but in the ballpark for someone who isn't interested in fighting.

lillamy

We split our assets the way we wanted to. The judge just signed off on it after making sure that nobody got screwed over.

I have seen friends going through divorces and doing what your AH suggests -- one of them has kept their own 401K and the other the house (valued at equal value to the 401K). I don't think the court really cares who gets what, as long as it's split equally.

android1

In my divorce we just filled out the forms the family court had. We split things the way we saw fit. I kept my 401I and pension, the firm didn't even ask how much it was, I just checked a box saying I got to keep it. Basically what ever you agree on they will sign off. I provided 85% of the financial support in our marriage, they don't even ask how much you make in the papers.

I suggest getting the Co-poetioner form and looking it over and talking to family law.

lizatola

That's good to hear, I will still be consulting with a lawyer or professional mediator of course. Keeping the 401K was my AH's suggestion and he is well aware that if he withdrew from it before retirement age that he would have to pay penalties and taxes.

I have lots of friends whom I can go to for advice, as well. I still have financial advisors I can call, 2 of my neighbors are accountants, and I have my own experience in banking and finance. I really was just curious as to whether the courts forced you to split assets a certain way or not.

MsPINKAcres

((Liz))

You weren't around SR when I went thru my divorce with my now ex AH ~
You could probably search the threads to read some of my post -

My ex AH & I had always agreed that when 1 of us was ready to go - we would NOT do "ugly" - we would shake hands, be thankful for the years and divide the spoils and walk away as friends ~

well my friend - let me share with you - the disease did not allow him to do this ~

Up until I received papers in the mail I had no idea what he had planned - He sued for 1/2 of my retirement, 1/2 the value of my vehicle, my paycheck was garnished for his unpaid medical bills & for our house note that he refused to leave & refused to pay the house note ~ he also sued for spousal support because he refused to work on the books - he continued to work for "cash" under the table.

It was one that got uglier than ugly ~ truly more than I ever would have imagined ~ I made it thru but it was a long horrid process ~

It is sometimes better to have that legal advise ready & waiting - to be prepared & to never have to use it would be a great blessing ~

Wishing the best for you ~

PINK HUGS,
Rita

Thumper

My ex got 100% of my 401K. Penalties were taken out before he received the check but even though it was my 401K he paid the income tax on it because the check went to him. Ha HA - because he thought that would work out the other way and was taking some delight in sticking it to me at tax time. :/

I live in a 50/50 state and his school loans were twice what the cash out value for my 401K was. I could have either cashed out the 401K or took a loan out to pay off half. I didn't think that was fair but I didn't have the money to fight in court, especially in a 50/50 state so probably wouldn't have won the loan fight anyway and I still would have had to give him 1/2 the 401K. I also couldn't be saddled with a loan that big when I knew he'd bail on me and I'd be raising four kids alone.

My ex always talked badly of people that did those kinds of things during a divorce and said how he'd never do that and be so reasonable about houses etc. yet of course he did the same thing. He wouldn't pay anything on the repairs to sell the house or the house payments (never did pay anything on that) and of course - he got 1/2 the profit. I would have had to pay more to go to court over it. When push comes to shove he wanted me to PAY and pay I did. Worth every penny too.

SoaringSpirits

I'm in CA, also a no-fault state and also a community property state. Yes, you can do your own amicable split. We are doing what is called "collaborative divorce" and are using a mediator. This provides the couple with a lot of control and keeps the decisions out of the court. What this means is that we each have retained our own collaborative divorce attorney who provides individual consult and also vets the various settlements (assets, custody, support) we come up with in mediation. The mediator is an attorney that we chose/hired together and a neutral party.

If collaboration or mediation fail (due to refusal of one or both partners to be collaborative), then you move to traditional divorce in court. There is lot of incentive to stay in the collaborative path because you have to sign an agreement to this effect. If collaboration fails, you have to start all over with a new attorney -- ouch. So it's important that both parties are behind the collaboration/mediation path.

In my experience, all the assets have been documented (appraised value of real estate, current estimated value of stocks and retirement) and we are doing some "horse trading" with them. We've got real estate, cash, stocks and IRAs and we're making all the decisions on division of these assets. I'm keeping the more expensive primary residence, and he's getting more of the stocks, IRA, etc. Where you get into selling your house is when you can't make the other person whole via an asset swap or buy them out straight.

Google "collaborative divorce" in your county and there should be some attorneys with websites where you can read up on it. If your AH is amenable to this, I highly suggest this route if you two think you can make it work. It can be less expensive and make for a less damaged relationship post-divorce which is important since you have a child. My AH and I have remained relatively amicable through the whole thing (emphasis on relative, LOL...)

MTA: Not sure if this is an option in AZ, but we're doing a legal separation for the sole reason that I can remain on AH's health insurance. LS is basically the same as divorce in CA, except that you are still married on paper. Down the road, when I have work and health insurance, we will go ahead and divorce legally.

4MyBoys

I have to echo Ms.PinkAcres. My seperation was going very amicably until the divorce papers were actually served. Now it is like WWIII. Protect yourself and get advice from a lawyer. There are constantly facets I would not have even thought of cropping up. And I have the added bonus of a STXAH who was a police officer with only 4 years left until retirement and now because he doesn't want to pay me, is going out on a medical leave of some sort. He has now not gotten a check for two months. I am not even seeing his half of the daycare costs let alone anything else. And this is from a man who has worked since he was 16. I never, never, never saw this coming.

4MyBoys

mmk11

My understanding is you and your husband can agree to whatever you want. Judges prefer that and they will sign off on whatever you decide.

I'm going through a D and my STBXAH and I agreed nearly everything except two things. We didn't want to get into splitting 401K accounts, we're each keeping our own. We decided on who is getting what from the house.

Loughborough

Hi, I don't know if this will help in your case or not, but a close friend of mine recently went through a divorce. This is in New York State, but she and her now exhusband used a mediator, and that kept everything amicable. They have a house, he kept that and bought her "half" from her, so she has that money....but he also has a number of assets that are "his," that he wanted to keep, that he did not want to sell, and actually did not want to sell because he did not want her to have half the money from them (also a 50/50 state here). My friend just wanted things finalized so she agreed that that would be fine, she didn't want the money, just wanted out, the mediator said that it COULD definitely be done, but they (or maybe just her), can't remember now, had to sign paperwork stating that she did not want the assets split 50/50, she was okay with him keeping "his assets" and not splitting with her.

So in the end, he definitely ended up with a lot more than her, but she is much happier now and in answer to your question.....yes, it can be done even without having attorneys involved.

Titanic

Then, there's also the stuff that each spouse had before the marriage (not counting the interest or appreciation on that "principal" during the marriage) and the stuff that each one may have gotten as an inheritance/gift during the marriage. I think the rules as to what rights the other spouse has may be different for those - that is, zero, perhaps. Bueller, Bueller, Anybody?

Thumper

Where I am if the debt or asset was aquired before marriage - it was exempt from the 50/50 split.