401k distributions

[gahag]

In New York state, how/when is a valuation date set for when 401k assets must be transferred? Is it by a date agreed upon in a separation agreement or the date of the separation agreement or the date of a divorce decree ?
Conflict arising around this because of recession reduced values and who should be responsible for those (losses).

Thank You

 

[LdiJ]

In New York state, how/when is a valuation date set for when 401k assets must be transferred? Is it by a date agreed upon in a separation agreement or the date of the separation agreement or the date of a divorce decree ?
Conflict arising around this because of recession reduced values and who should be responsible for those (losses).

Thank You

Did the agreement give the other party a set amount of money or a percentage of the total?

Did the party to receive a share of the 401k give up other marital assets in exchange for that share?

Forgetting tax implications for a moment...just to make the example simple...if you kept the other party's share of the equity in the home, in exchange for half of the 401k, then there is a problem if the 401k lost value, but the home did not. There is also a problem if the agreement specified that the party was to receive a set dollar figure.

Ideally, from a fairness standpoint you should each end up with half of the marital assets, and if some of those assets reduced before they could be divided, then the property settlement should likely be reconfigured to take that into consideration.

However, legality and fairness are not always the same.

 

[mistoffolees]

Did the agreement give the other party a set amount of money or a percentage of the total?

Did the party to receive a share of the 401k give up other marital assets in exchange for that share?

Forgetting tax implications for a moment...just to make the example simple...if you kept the other party's share of the equity in the home, in exchange for half of the 401k, then there is a problem if the 401k lost value, but the home did not. There is also a problem if the agreement specified that the party was to receive a set dollar figure.

Ideally, from a fairness standpoint you should each end up with half of the marital assets, and if some of those assets reduced before they could be divided, then the property settlement should likely be reconfigured to take that into consideration.

However, legality and fairness are not always the same.

Fairness has absolutely nothing to do with it.

The only thing that matters is what the divorce decree says. So what does it say specifically with respect to the 401K?

To answer the original question, unless the decree says otherwise, the person who owns the 401K should transfer the stated portion to the other person immediately upon the divorce being finalized. There is no excuse for delaying. If they delay, it is up to the other party to file for contempt to force it.