<p>Can anyone explain the requirement for spousal consent when taking a loan from one’s 401-K or changing its beneficiary?</p>
<p>It is assumed that any retirement dollars are there to benefit both the husband and wife during retirement years. There have been cases in the past where one spouse drained retirement accounts without the other knowing and then when they got to retirement years, no money-or the one spouse files for divorce and leaves the other high and dry. It’s for notification purposes.</p>
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But the consent can be denied. I have a huge problem with this.</p>
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<p>I would have thought this type of regulation is more likely to be implemented in community property states where all property regardless of whether they’re jointly owned or brought in before the marriage with possible exception of trusts established well-before marriage were considered “community property”.</p>
<p>New York State is not a community property state so the above is surprising…especially if the 401k/retirement account concerned is not jointly owned. </p>
<p>Then again…I’m not a lawyer so what do I know.</p>
<p>This is standard for all employment-related retirement accounts, pensions or 401k/403b, as far as I know. I don’t think it’s required for IRAs. And you cannot name someone other than your spouse primary beneficiary without consent. </p>
<p>It is also true of pensions. My husband has a very small pension from a long-ago job that has started to pay out. There were several payout options, and I had to sign off on the choice. </p>
<p>I am not sure whether this is governed by law or by employers’ choices when setting up the plans. I suspect the latter, as laws would not be uniform in all states.</p>
<p>Federal law. There were enough situations where a spouse (usually the widow) learned only after being widowed that the spouse had elected pension options that didn’t provide a dime for the widow after the spouse’s death. If the law didn’t require the spouse to sign off on that, we’d probably still be seeing that happen today. I’m hard-pressed to disagree.</p>
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So now men can prevent women from being fully financially independent. Nice.</p>
<p>(one of my co-workers is going through this now.)</p>
<p>You could also say that a woman could prevent a man from being independent. If the two people didn’t want a check and balance system in their life, they should have stayed single.</p>
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That is absolutely true and I stand corrected.</p>
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I don’t think its about checks and balances. The issue of “consent” really bothers me when we are talking about adults. Notification I could live with. Not consent.</p>
<p>Because the money belongs to both people. I don’t know why you would have a problem with this. Why would someone want to take money out of the 401K without their spouses consent? If things are so bad in the marriage, then get a divorce and take your half then.</p>
<p>If notification were reasonable, then should I have the right to sell our home and only allow my husband to be notified? I think both of us should have equal say and they goes away when one person has the right to do whatever they want while the other is notified. I cannot think of anything upstanding that needs to be done behind someone else’s back like this.</p>
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In this case, they are preparing to divorce and the husband has stopped paying any and all bills. Wife needs to remove some money from 401-K to pay mortgage. He refuses to give consent. She has no rights to any of his paycheck.</p>
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I’ve been married for almost 27 years. Happily. My 401-K is mine. His pension is his. I would never think I had a right to a say in that and he doesn’t think he has a say, either.</p>
<p>“I’ve been married for almost 27 years. Happily. My 401-K is mine. His pension is his. I would never think I had a right to a say in that and he doesn’t think he has a say, either.”</p>
<p>Not saying’ that ZM should run and get a divorce… 
But is NY an equitable distribution state? Apparently so, then certain 401k and pension plans are a fair game when it comes to property division. I’m not a lawyer, and I have not stayed in a Holiday Inn lately, so anyone considering divorce in NY state please consult a real lawyer :)</p>
<p>Yes, NY is an “equitable distribution” state, which, imho, is not so different from a community property state. If a person gets divorced, the state has the right to divide up maritial assets and a 401K or pension earned while married could be divied up.</p>
<p>I think the key concept is that the 401k and pensions are deferred compensation. They were earned years ago. So if a couple is divorcing now, any retirement accounts should be shared if the contributions were made during the marriage, no matter who made the contributions.</p>
<p>zm, your friend’s husband sounds like a major jerk. I’m sure that he will make the divorce as difficult as possible and, if there are children, he will make her life as difficult as he can even after they are divorced. At least she will be relatively free of him at some point. I hope she has a good lawyer.</p>
<p>zoosermom–so you would be ok with your spouse draining his 401K account and betting on a horse race without your knowledge? Not only has he drained your retirement funds, you also have to now pay tax on those funds. You are ok with that? This is basically what you are agreeing to by saying you don’t like that a spouse has to give consent.</p>
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I’m not basically saying that. I am explicitly stating that my 401-k is mine and his pension is his. I understand other people can disagree, but I have a huge problem with needing anyone’s consent to manage the money I have earned.</p>
<p>Of course, he was crazed (and rightly so) back in the day when I had to consent to his vasectomy. We are just that kid of people.</p>
<p>Well, if you are both on the same page and have no problems with him blowing his pension on a race horse or him the same with you, it shouldn’t be a problem with him giving consent then. What about women that don’t have access to retirement accounts for some reason or have small retirement accounts compared to their husbands and would be destitute without access to their husband’s 401K? Do you not share money now? Do you have separate accounts for everything? When you retire, is his pension money only going for things for him? What if your 401K takes a huge hit right before you retire and you don’t have enough money, will he share?</p>
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It is a problem for me. Why is it so hard for you to accept that someone can hold an opinion that is different from yours?</p>
<p>Zooser – I am not aware of any state that doesnt give a spouse rights under either community property or equitable distribution. If you live in such a state, though, fine. If not, I do not see this as govt overstepping.</p>
<p>If you do not like how the state governs spousal rights, then I suggest a prenup and post nup. I dont see signature on form as that big a deal</p>