Is Passive Appreciation on 401K allowed in Divorces in the State of Florida?

[wallyjesco]

What is the name of your state? Florida


I am in Florida and I aware of the following:

PROPERTY DISTRIBUTION - Equitable Distribution

PROPERTY MODEL - Dual Property Model

INCREASE IN VALUE OF SEPARATE PROPERTY - Separate Property

But I am not of legal mind to understand what it means in my situation. I am divorcing and my 401(k) increased incredibly during the duration of our marriage. My question is, is the value of the 401(k) prior to getting married and the gains it accrued, marital property? I know that anything I contributed during the marriage and the gains are marital property but I am not sure about the stuff that was in there before.



Example:

• 401(k) value in 2004 was $200k
• I contributed $140k into the 401(k) from 2004 to 2018
• 401(k) value in 2018 at the time of filing was $1.2M

The question is then, is the $200k plus what that $200k grew to, marital status? Right now the easy way to look at this is to say that we divide the $1M growth in half and give her $500k. If i am reading the Passive Appreciation literature right, it is possible that the $200k and the gains of that $200k is not marital asset which may reduce the amount I have to give her as part of my 401(k).



So I need to know if this is even worth looking into considering I am in the State of Florida. My counsel thinks it might be something to look into but an expert in this area of expertise is not going to be cheap. I don't want to spend the money if in this state it doesn't matter. Recommendations...

 

[PayrollHRGuy]

What is the name of your state? Florida


I am in Florida and I aware of the following:

PROPERTY DISTRIBUTION - Equitable Distribution

PROPERTY MODEL - Dual Property Model

INCREASE IN VALUE OF SEPARATE PROPERTY - Separate Property

<Link removed>



But I am not of legal mind to understand what it means in my situation. I am divorcing and my 401(k) increased incredibly during the duration of our marriage. My question is, is the value of the 401(k) prior to getting married and the gains it accrued, marital property? I know that anything I contributed during the marriage and the gains are marital property but I am not sure about the stuff that was in there before.



Example:

• 401(k) value in 2004 was $200k
• I contributed $140k into the 401(k) from 2004 to 2018
• 401(k) value in 2018 at the time of filing was $1.2M

The question is then, is the $200k plus what that $200k grew to, marital status? Right now the easy way to look at this is to say that we divide the $1M growth in half and give her $500k. If i am reading the Passive Appreciation literature right, it is possible that the $200k and the gains of that $200k is not marital asset which may reduce the amount I have to give her as part of my 401(k).



So I need to know if this is even worth looking into considering I am in the State of Florida. My counsel thinks it might be something to look into but an expert in this area of expertise is not going to be cheap. I don't want to spend the money if in this state it doesn't matter. Recommendations...

You post has been reported because of the commercial link. If taken down it will likely be put back after the link is removed.

 

[wallyjesco]

You post has been reported because of the commercial link. If taken down it will likely be put back after the link is removed.

I apologize as you can see I am new to this forum and I was not aware that there is an issue with including "commercial" links in a post. Is there anything I should do to resolve this issue or should I just let the report take its coarse?

 

[Zigner]

You are represented. It would be unwise for us to second-guess your counsel. If your attorney feels that an expert should look at it, then have an expert look at it. This is worth way too much to trust to random strangers on the internet.

 

[wallyjesco]

You are represented. It would be unwise for us to second-guess your counsel. If your attorney feels that an expert should look at it, then have an expert look at it. This is worth way too much to trust to random strangers on the internet.

Hello Zigner and thank you for your response. I completely understand where you are coming from but the problem is that my counsel hasn't given me a warm and fuzzy that this approach will even work. In fact in his own words, he is basing it on speculation. All I am trying to find out in this forum is whether the state of Florida will even allow Passive Appreciation to be taken into account when determining the amount or percentage of 401 (k) to award my spouse. I would hate to pay an expert over 5K for something that never had a chance of working because of the laws in Florida. My understanding is that every state handles Passive Appreciation differently.

Thank you.

 

[LdiJ]

Hello Zigner and thank you for your response. I completely understand where you are coming from but the problem is that my counsel hasn't given me a warm and fuzzy that this approach will even work. In fact in his own words, he is basing it on speculation. All I am trying to find out in this forum is whether the state of Florida will even allow Passive Appreciation to be taken into account when determining the amount or percentage of 401 (k) to award my spouse. I would hate to pay an expert over 5K for something that never had a chance of working because of the laws in Florida. My understanding is that every state handles Passive Appreciation differently.

Thank you.

Why do you believe that we could provide better answers than an attorney who actually practices in Florida?

 

[not2cleverRed]

I apologize as you can see I am new to this forum and I was not aware that there is an issue with including "commercial" links in a post. Is there anything I should do to resolve this issue or should I just let the report take its coarse?

How odd. Are you sure you're not being disingenuous? I recall a recent (now deleted) post on the same topic. That poster wasn't happy that people referred to his posting history, and advised that he heed his lawyer's advice.

 

[wallyjesco]

How odd. Are you sure you're not being disingenuous? I recall a recent (now deleted) post on the same topic. That poster wasn't happy that people referred to his posting history, and advised that he heed his lawyer's advice.

I have no idea what you are referring to and I have no reason to be disingenuous. I literally just registered to this site last Thursday. I hope you are not an indication of the type of lack of help that is provided here.

 

[not2cleverRed]

I have no idea what you are referring to and I have no reason to be disingenuous. I literally just registered to this site last Thursday. I hope you are not an indication of the type of lack of help that is provided here.

Well, I'm not an obvious observer for nothing.

I am sorry that you are dissatisfied with the quality of service that has been provided here. And if there has been a mistaken identity, I apologize. There are occasionally people who do act disingenuously here, and so one becomes jaded.

Your understanding of passive appreciation jibes with my understanding.

What matters, though, is how contentious this divorce is, and much effort (legally) do you think you ex is willing to exert in arguing over it.

I know that in my divorce I painstakingly went over my financial records to show explicitly that the assets I was claiming were premarital were indeed premarital. My lawyer concurred with your understanding of passive appreciation, but I wanted to make sure that at least I'd be prepared if someone wanted to say otherwise. My ex is a math whiz with no understanding of investments.

My ex submitted next to nothing relevant (less than 6 months, nothing from before the divorce filing), but responded to discovery with gibberish in a cut and paste document 5 minutes before the divorce trial. Like, basically cut and pasted from my discovery statement that what was his was his, what was marital was his, and what was mine was ours. As in, investments that I had made decade before I even met him, and IRA and retirement accounts that had had no contributions during the marriage, he was going to assert were marital assets. Perhaps if my ex hadn't fired his lawyer just before trial that wouldn't be the case...

My lawyer rejected my ex's joke of paperwork, and none of it was used in trial. However, you have to be prepared, just in case, and have all the key information at your fingertips in case your lawyer misplaces something. And you now that Murphy's Law is that if you forget one thing, that's what's going to be needed.

An observation: any documentation handled by your lawyer's office is going to cost you. No matter how organized and orderly your records are, someone over there is going to have to go over them, and that's billable time and adds up, even if though it's not at a lawyer rate.

Therefore, my advice would be to have your records in order, but only submit a brief outline and spreadsheet of the assets in question to your lawyer unless and until more is asked for. If both of you are represented by competent legal counsel, and both of you are practical, you can mediate a fair and equitable resolution.

 

[wallyjesco]

Well, I'm not an obvious observer for nothing.

I am sorry that you are dissatisfied with the quality of service that has been provided here. And if there has been a mistaken identity, I apologize. There are occasionally people who do act disingenuously here, and so one becomes jaded.

Your understanding of passive appreciation jibes with my understanding.

What matters, though, is how contentious this divorce is, and much effort (legally) do you think you ex is willing to exert in arguing over it.

I know that in my divorce I painstakingly went over my financial records to show explicitly that the assets I was claiming were premarital were indeed premarital. My lawyer concurred with your understanding of passive appreciation, but I wanted to make sure that at least I'd be prepared if someone wanted to say otherwise. My ex is a math whiz with no understanding of investments.

My ex submitted next to nothing relevant (less than 6 months, nothing from before the divorce filing), but responded to discovery with gibberish in a cut and paste document 5 minutes before the divorce trial. Like, basically cut and pasted from my discovery statement that what was his was his, what was marital was his, and what was mine was ours. As in, investments that I had made decade before I even met him, and IRA and retirement accounts that had had no contributions during the marriage, he was going to assert were marital assets. Perhaps if my ex hadn't fired his lawyer just before trial that wouldn't be the case...

My lawyer rejected my ex's joke of paperwork, and none of it was used in trial. However, you have to be prepared, just in case, and have all the key information at your fingertips in case your lawyer misplaces something. And you now that Murphy's Law is that if you forget one thing, that's what's going to be needed.

An observation: any documentation handled by your lawyer's office is going to cost you. No matter how organized and orderly your records are, someone over there is going to have to go over them, and that's billable time and adds up, even if though it's not at a lawyer rate.

Therefore, my advice would be to have your records in order, but only submit a brief outline and spreadsheet of the assets in question to your lawyer unless and until more is asked for. If both of you are represented by competent legal counsel, and both of you are practical, you can mediate a fair and equitable resolution.

Apology accepted. Thank you for your detailed response.