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Over looked tips for S/D

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stronger08 posted 7/4/2013 04:24 AM

I was thinking about something my attorney had told me during my S that I've never seen here before. So I thought I would share. Right after the financial disclosure and a temp separation was agreed upon he told me to stop funding my 401K. Like most I had it deducted pretax from my paycheck. I never gave it much thought before he mentioned this. But it actually saved me some money on the back end of the D. His reasoning was this. By the time you reach an agreement for the final division of assets and then the slow pace the court takes to sign off on the D. This process could be around 2 years give or take. During this time you are actually paying your STBX more money. For every contribution I was making she would get half. Do the math and you will find that came out to several thousands of dollars. If you put $1,000.00 a month in your 401K and it takes 2 years to finalize. That's $12,000.00 you put in your STBX pocket. He told me to keep the excess cash on hand and after the D was final to make the contribution during the first year I filed as single. Not only did it save me money it stopped my XWW from getting anymore. I actually was able to reduce my tax liability the year I put it back in. Im sure there are others here who have tips that are not mentioned often. Maybe we can help out those going through the D process.

Jennifer99 posted 7/4/2013 08:33 AM

I would have never thought of that. Mine isn't in the $1,000 but it matters to me.

ButterflyGirl posted 7/4/2013 09:04 AM

Yeah, mine is over $4000 more than what it was when I filed in November (maybe some fluctuations in the market too? It's a 401b, if that makes a difference..). But I thought I'm not allowed to be changing any accounts right now.. Definitely gonna ask my attorney this.. Thinking my divorce is going to continue to take a while..

Jennifer99 posted 7/4/2013 09:16 AM

Butterfly girl - if you are having it deducted pre-tax you won't be able to make any changes until the open enrollment period/end of plan year. If you are not taking it pre-tax then yes, I would ask your Att if it is ok.

But, since I haven't started the D process I'll be ready and doing this at OE at the end of this year.

heartbroken_kk posted 7/4/2013 09:31 AM

I'm putting together a "Divorce Binder" where I am putting printouts of emails, other evidence, checklists, articles from the web, etc.

Since I'm trying to be my own lawyer, I want to be super organized when we go into mediation or hearings, etc.

I also have a google doc spreadsheet where i can drop info, make notes, etc from my phone or computer.

ButterflyGirl posted 7/4/2013 09:33 AM

Yeah, it's deducted pre-tax.. But I think open enrollment is in August/September at my company, so maybe soon..

Thanks again for that! It's certainly an "overlooked tip"

stronger08 posted 7/4/2013 13:07 PM

You can change your contribution amount at any time. You do not need to wait till next year.

miadianna posted 7/4/2013 16:52 PM

My XH did that because he knew after 25 years married the judge would grant me some part of that 401K. Our divorce took three years.

Then after the divorce was final he started putting the maximum amount for his age in every year which is $22,500 a year. The problem for me was that my alimony was based on gross salary and he (I believe on purpose) used the amount he reported to the IRS on his tax return as gross salary, which is wrong. Never showed me his W-2. Now we are back in court, what a mess.

roughroadahead posted 7/4/2013 16:56 PM

For anyone who is contemplating any financial moves after you have filed, please check with your L. While I am not commenting on adjusting 401(k) contributions specifically, certain actions may be in contempt in states in which the judge issues a mutual (mostly financial) restraining order upon filing.

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