Lopez v. Lopez: Evidence that the husband spent salary on girlfriend did not permit the dissolution court to allocate depleted 401(k) retirement funds.
By Laura Morgan, Family Law Consultant
Lopez v. Lopez: Evidence that husband improperly spent a portion of his monthly income on his girlfriend did not permit dissolution court to allocate depleted 401(k) retirement funds that were properly used, such as for attorney fees, and therefore, only depleted marital funds that should have been be allocated to husband in equitable distribution were those that the trial court found were spent on his girlfriend, not the 401(k)’s entire previous balance.
Laura Morgan is a Family Law Consultant. Laura is available for consultation, brief writing and research on family law issues throughout the country. She can be reached through her website. www.famlawconsult.com
A tax-free division is possible, but each plan or account has different requirements. Without the right process, clients may be subject to significant taxes, penalties, expenses and ultimately an un-equitable division. While the division of marital property is generally governed by state domestic relations law, any assignments of qualified retirement interests – for example, a 401(k) plan or pension plan – must also comply with Federal law, namely the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986 (the Code).