Missing $50,000 from community property

[ecmst12]

You can hire a forensic accountant, but they are Not Cheap.

 

[cbg]

Her employer, who provided this fund, did not have too many employees to be required to do it under 401K name. So, I know for a fact that this is NOT a 401K plan. It is something similar and don't know the rules and regulations governing this particular plan.

I don't know what you think you're talking about here, but there is no minimum (or maximum) number of employees before you can "do it under 401k name". You may be right that it's not a 401k plan, but if so, it's not because the employer "did not have too many employees". That's utter nonsense.

Let's be clear. The law does not say that all 401k plans require spousal approval. The law says that IF the specific plan requires spousal approval for a distribution, that spousal approval must be in writing.

Is this "something similar" a 403b?

 

[Bali Hai]

Her employer, who provided this fund, did not have too many employees to be required to do it under 401K name. So, I know for a fact that this is NOT a 401K plan. It is something similar and don't know the rules and regulations governing this particular plan.

I don't know what you think you're talking about here, but there is no minimum (or maximum) number of employees before you can "do it under 401k name". You may be right that it's not a 401k plan, but if so, it's not because the employer "did not have too many employees". That's utter nonsense.

Let's be clear. The law does not say that all 401k plans require spousal approval. The law says that IF the specific plan requires spousal approval for a distribution, that spousal approval must be in writing.

Is this "something similar" a 403b?

A 403b (for non-profit institutions) is very similar to a 401k except for lower administrative costs.

Whether the account was a 401k, 403b or some other tax deferred plan is not relevant to the stbx wife's attempt to hide this money from discovery.

 

[cbg]

Very similar, yes, but not identical. The rules have changed making them closer than they used to be, but there are still more differences than simply lower administrative costs.

Whether the account was a 401k, 403b or some other tax deferred plan is not relevant to the stbx wife's attempt to hide this money from discovery.

If I were inquiring simply out of a desire to identify the type of plan, that would not be relevant. But since the type of plan, and thus the rules for distribution, could affect whether she can be forced to reveal how the money was used, I'd say that makes a difference.

I fully realize that your agenda is to beggar all women, but since I'm asking questions in an attempt to give leverage to the poster, perhaps you can do as I suggested and take your agenda off somewhere, where it will be more appreciated. Like the town dump.

 

[Bali Hai]

Very similar, yes, but not identical. The rules have changed making them closer than they used to be, but there are still more differences than simply lower administrative costs.

Whether the account was a 401k, 403b or some other tax deferred plan is not relevant to the stbx wife's attempt to hide this money from discovery.

If I were inquiring simply out of a desire to identify the type of plan, that would not be relevant. But since the type of plan, and thus the rules for distribution, could affect whether she can be forced to reveal how the money was used, I'd say that makes a difference.

I fully realize that your agenda is to beggar all women, but since I'm asking questions in an attempt to give leverage to the poster, perhaps you can do as I suggested and take your agenda off somewhere, where it will be more appreciated. Like the town dump.

I will give some serious consideration to your suggestion. In the men's room.

 

[missing50k]

Even though I think I hear the 403b label, since her employer was not a non-profit organization, I am not sure if I am telling you the right thing. I know for a fact that it is something like a brokerage account (like a 401K) managed by a 3rd party. Again, I was in total financial darkness. My attorney is not very helpful explaining me what the hell has happened and I didn't have enough time to dig through 3 boxes full of discoveries yet, which is especially harder, since I moved 100 miles away for a new job.

So, let's assume this plan of hers didn't require a spousal approval for any kind of liquidation. Is she free to do such a thing and sock the money away as she desires, while most of the contribution to this fund has happened while married ?

And, whose burden is it to prove where this money is. I mean, do I have to hire a PI or a Forensic Accountant as suggested above to prove, the money is nowhere to be found, or is it her burden to prove that, money withdrawn is used for something enhancing the living of the married couple ? I.e., something we both have benefited when she dissolved this account ? That's where I am puzzled.

 

[cbg]

For the purpose of this answer, it is assumed that the money is from some form of retirement account. If that is not the case, this answer does not apply.

IF spousal approval is not required then the money is hers to do with as she wishes within limits. Distributions from a retirement plan are very, very restricted by Federal law. She can roll it over into another qualified plan; she can take a loan for whatever purpose she wishes, or she can take a hardship withdrawal for one of the limited reasons permitted by the IRS. A loan WILL have to be repaid, with interest, and if it is not it will be treated as taxable income when she files her taxes at the end of the year.

The question then becomes whether you can show that she took this distribution for the purpose of hiding it from marital assets. I don't think that's an unreasonable conclusion, assuming you also conclude that she was planning the divorce two years in advance. Which is not impossible.

 

[tranquility]

And, whose burden is it to prove where this money is. I mean, do I have to hire a PI or a Forensic Accountant as suggested above to prove, the money is nowhere to be found, or is it her burden to prove that, money withdrawn is used for something enhancing the living of the married couple ? I.e., something we both have benefited when she dissolved this account ? That's where I am puzzled.

If the money was there when the divorce was filed, she would have the burden to account for the funds. However, by turning over the records, that may have been accomplished. The burden to prove that she breached her fiduciary duty is the person claiming the breach. In other words, she has to turn over the records, but you have to use those records to prove the breach of her duty.

 

[missing50k]

For the purpose of this answer, it is assumed that the money is from some form of retirement account. If that is not the case, this answer does not apply.

IF spousal approval is not required then the money is hers to do with as she wishes within limits. Distributions from a retirement plan are very, very restricted by Federal law. She can roll it over into another qualified plan; she can take a loan for whatever purpose she wishes, or she can take a hardship withdrawal for one of the limited reasons permitted by the IRS. A loan WILL have to be repaid, with interest, and if it is not it will be treated as taxable income when she files her taxes at the end of the year.

The question then becomes whether you can show that she took this distribution for the purpose of hiding it from marital assets. I don't think that's an unreasonable conclusion, assuming you also conclude that she was planning the divorce two years in advance. Which is not impossible.

As I have said in my original post, in our almost 9 years of marriage, this divorce word came at least 4 or 5 times that I can remember, from her as "I want a divorce" and the argument diffused by me each time. I know for a fact that she told me she talked to an attorney about her case long before this dissolution like 3 years before. So she might have had legal help, planning for her upcoming divorce. Since she was divorced once before, I am assuming she knew lot more than I did and her filing was a well planned attack.

According to her, this money has been withdrawn as cash and spent. She did not provide any details how it was spent and where the funds went. I am having hard time wrapping my head around spending ~30K (50K minus penalties) and still having to make the ends meet barely. Even if she spent this money, I did not realize she was helping the family finances with that.

If the money was there when the divorce was filed, she would have the burden to account for the funds. However, by turning over the records, that may have been accomplished. The burden to prove that she breached her fiduciary duty is the person claiming the breach. In other words, she has to turn over the records, but you have to use those records to prove the breach of her duty.

So, basically, as long as she provided a paper from plan administrator company saying this account has been dissolved during marriage and she provided bank records at the time of dissolution of funds, it is up to me to match those two together to prove that money is nowhere to be found, hence presumed hidden. Is this the right take from your statement ?

 

[Bali Hai]

As I have said in my original post, in our almost 9 years of marriage, this divorce word came at least 4 or 5 times that I can remember, from her as "I want a divorce" and the argument diffused by me each time. I know for a fact that she told me she talked to an attorney about her case long before this dissolution like 3 years before. So she might have had legal help, planning for her upcoming divorce. Since she was divorced once before, I am assuming she knew lot more than I did and her filing was a well planned attack.

According to her, this money has been withdrawn as cash and spent. She did not provide any details how it was spent and where the funds went. I am having hard time wrapping my head around spending ~30K (50K minus penalties) and still having to make the ends meet barely. Even if she spent this money, I did not realize she was helping the family finances with that.



So, basically, as long as she provided a paper from plan administrator company saying this account has been dissolved during marriage and she provided bank records at the time of dissolution of funds, it is up to me to match those two together to prove that money is nowhere to be found, hence presumed hidden. Is this the right take from your statement ?

You need to convince the judge that she has hidden the money. If the judge has been convinced, she can be jailed until she produces the cash. Like Mr. Beatty Chadwick was for 14 years. Don't get your hopes up, it would take alot less convincing if it were she who was accusing you of hiding assets. Just ask Mr. Chadwick.

 

[missing50k]

You need to convince the judge that she has hidden the money. If the judge has been convinced, she can be jailed until she produces the cash. Like Mr. Beatty Chadwick was for 14 years. Don't get your hopes up, it would take alot less convincing if it were she who was accusing you of hiding assets. Just ask Mr. Chadwick.

Unfortunately I am realizing that. Women get preferential treatment from the judicial system in divorce cases. I am almost going to say that my attorney (who is a divorced female by the way) is expecting me to roll over and give up everything she wants. I was the one who brought up these issues and she seemed convinced to see a line item in an excel spreadsheet in my stbx's computer, saying the account has been dissolved. I wish I had come into an unexpected large sum of money. I would spend every last dime of it to go find a pitbull like lawyer to fight this tooth and nail instead of this ambulance chasers.

 

[Zigner]

Even if she spent this money, I did not realize she was helping the family finances with that.

THIS is why you have no real case here. You allowed yourself to be absolutely oblivious. It can be claimed that the money was spent to help you make ends meet (barely) and you have no way to even begin to hint to the court that this might not be true. This is NOT a matter of women getting preferential treatment. This is much more a matter of somebody being so unconcerned about their life that they have no clue what is going on.

 

[tranquility]

Sections from the family code (emphasis mine):

721. (a) Subject to subdivision (b), either husband or wife may
enter into any transaction with the other, or with any other person,
respecting property, which either might if unmarried.
(b) Except as provided in Sections 143, 144, 146, 16040, and 16047
of the Probate Code, in transactions between themselves, a husband
and wife are subject to the general rules governing fiduciary
relationships which control the actions of persons occupying
confidential relations with each other. This confidential
relationship imposes a duty of the highest good faith and fair
dealing on each spouse, and neither shall take any unfair advantage
of the other. This confidential relationship is a fiduciary
relationship subject to the same rights and duties of nonmarital
business partners, as provided in Sections 16403, 16404, and 16503 of
the Corporations Code, including, but not limited to, the following:
(1) Providing each spouse access at all times to any books kept
regarding a transaction for the purposes of inspection and copying.
(2) Rendering upon request, true and full information of all
things affecting any transaction which concerns the community
property. Nothing in this section is intended to impose a duty for
either spouse to keep detailed books and records of community
property transactions.
(3) Accounting to the spouse, and holding as a trustee, any
benefit or profit derived from any transaction by one spouse without
the consent of the other spouse which concerns the community
property.

1100. (a) Except as provided in subdivisions (b), (c), and (d) and
Sections 761 and 1103, either spouse has the management and control
of the community personal property, whether acquired prior to or on
or after January 1, 1975, with like absolute power of disposition,
other than testamentary, as the spouse has of the separate estate of
the spouse.
(b) A spouse may not make a gift of community personal property,
or dispose of community personal property for less than fair and
reasonable value, without the written consent of the other spouse.
This subdivision does not apply to gifts mutually given by both
spouses to third parties and to gifts given by one spouse to the
other spouse.
(c) A spouse may not sell, convey, or encumber community personal
property used as the family dwelling, or the furniture, furnishings,
or fittings of the home, or the clothing or wearing apparel of the
other spouse or minor children which is community personal property,
without the written consent of the other spouse.
(d) Except as provided in subdivisions (b) and (c), and in Section
1102, a spouse who is operating or managing a business or an
interest in a business that is all or substantially all community
personal property has the primary management and control of the
business or interest. Primary management and control means that the
managing spouse may act alone in all transactions but shall give
prior written notice to the other spouse of any sale, lease,
exchange, encumbrance, or other disposition of all or substantially
all of the personal property used in the operation of the business
(including personal property used for agricultural purposes), whether
or not title to that property is held in the name of only one
spouse. Written notice is not, however, required when prohibited by
the law otherwise applicable to the transaction.
Remedies for the failure by a managing spouse to give prior
written notice as required by this subdivision are only as specified
in Section 1101. A failure to give prior written notice shall not
adversely affect the validity of a transaction nor of any interest
transferred.
(e) Each spouse shall act with respect to the other spouse in the
management and control of the community assets and liabilities in
accordance with the general rules governing fiduciary relationships
which control the actions of persons having relationships of personal
confidence as specified in Section 721, until such time as the
assets and liabilities have been divided by the parties or by a
court. This duty includes the obligation to make full disclosure to
the other spouse of all material facts and information regarding the
existence, characterization, and valuation of all assets in which the
community has or may have an interest and debts for which the
community is or may be liable, and to provide equal access to all
information, records, and books that pertain to the value and
character of those assets and debts, upon request.

See also, Williams v. Williams, 14 Cal. App. 3d 560 to show the spouse does not need to keep the type of records as a true trustee or handle things in the low risk way a true trustee needs to.

California Family Code Section 2102
(a) From the date of separation to the date of the
distribution of the community or quasi-community asset or liability
in question, each party is subject to the standards provided in
Section 721, as to all activities that affect the assets and
liabilities of the other party, including, but not limited to, the
following activities:
(1) The accurate and complete disclosure of all assets and
liabilities in which the party has or may have an interest or
obligation and all current earnings, accumulations, and expenses,
including an immediate, full, and accurate update or augmentation to
the extent there have been any material changes.
(2) The accurate and complete written disclosure of any investment
opportunity, business opportunity, or other income-producing
opportunity that presents itself after the date of separation, but
that results from any investment, significant business activity
outside the ordinary course of business, or other income-producing
opportunity of either spouse from the date of marriage to the date of
separation, inclusive. The written disclosure shall be made in
sufficient time for the other spouse to make an informed decision as
to whether he or she desires to participate in the investment
opportunity, business, or other potential income-producing
opportunity, and for the court to resolve any dispute regarding the
right of the other spouse to participate in the opportunity. In the
event of nondisclosure of an investment opportunity, the division of
any gain resulting from that opportunity is governed by the standard
provided in Section 2556.
(3) The operation or management of a business or an interest in a
business in which the community may have an interest.
(b) From the date that a valid, enforceable, and binding
resolution of the disposition of the asset or liability in question
is reached, until the asset or liability has actually been
distributed, each party is subject to the standards provided in
Section 721 as to all activities that affect the assets or
liabilities of the other party. Once a particular asset or liability
has been distributed, the duties and standards set forth in Section
721 shall end as to that asset or liability.
(c) From the date of separation to the date of a valid,
enforceable, and binding resolution of all issues relating to child
or spousal support and professional fees, each party is subject to
the standards provided in Section 721 as to all issues relating to
the support and fees, including immediate, full, and accurate
disclosure of all material facts and information regarding the income
or expenses of the party.

But, while spending it all on hookers and beer MAY not be managing the community property in the highest good faith, I don't see it a direct violation either. The real issue is if the money is a part of a deliberate misappropriation as defined by Marriage of Moore, 28 Cal. 3d 366 with a possible remedy under 2602:

California Family Code Section 2602

As an additional award or offset against existing property,
the court may award, from a party's share, the amount the court
determines to have been deliberately misappropriated by the party to
the exclusion of the interest of the other party in the community
estate.

In none of that do I see the advantage of being a woman under the law. Perhaps it's just because I don't feel misogynistically today.

 

[LdiJ]

Unfortunately I am realizing that. Women get preferential treatment from the judicial system in divorce cases. I am almost going to say that my attorney (who is a divorced female by the way) is expecting me to roll over and give up everything she wants. I was the one who brought up these issues and she seemed convinced to see a line item in an excel spreadsheet in my stbx's computer, saying the account has been dissolved. I wish I had come into an unexpected large sum of money. I would spend every last dime of it to go find a pitbull like lawyer to fight this tooth and nail instead of this ambulance chasers.

I have some more questions. You said that you were married for nine years, and that she took the money out two years before she filed for divorce, and that she had been self employed for some period before that.

Only the amount of retirement money that accrued during the marriage would be community property. Are you saying that the entire 50k was accrued during your marriage? However many years did she work during your marriage? If you were so oblivious as to what she was doing with your community property then how do you know how much money was in her retirement account, and how do you know how much of that accrued during the marriage?

To me, its truely feasible that the money has been spent. Its 25-30k after taxes, and over a 24 month period it would have been very easy to fritter away 1000.00 to 1500.00 a month in discretionary or budget supplementing money...particularly if she was also subsidizing her self employment.

 

[ecmst12]

A forensic accountant is who you call if you want someone to investigate whether she has accounts somewhere that she is not disclosing. I do not necessarily think they would be able to determine exactly where this mystery $30k went. If she took the money out 4 years ago, well I can assure you that you have spent at least $30k in that time on household expenses, personal expenses, necessities, and luxuries in that amount of time as well. But if your primary worry is that she has some huge savings account hidden somewhere that she is hiding from the court, a forensic accountant is your best chance to find it.

And LD's point is very worth noting - even IF you find a hidden account containing the money from this 401k, if she pulled it out from an account she accrued prior to the marriage, and kept it separate all this time, it isn't marital property anyway.