<p>I don’t see this as a lot different than state laws that provide for a minimum share for a spouse if the other spouse dies, even if the deceased spouse chose not to leave anything to the spouse in the will. You may want to leave it all to the feed-the-birds coalition, but your spouse has a right to some of your estate unless there was a valid prenup.</p>
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<p>Last I checked, NY State is not a community property state. However, it does provide for minimal levels of mandated spousal support even if the other spouse elects to leave him/her with nothing in the will.</p>
<p>Sorry - I posted off the top of my head, and there is a semantic difference. New York uses the term “marital property” – but the point in the same. Assets acquired during marriage, other than those acquired as gifts or via inheritance, are generally considered “marital” property, or property in which both spouses have a shared interest. New York law would deem part or all of the wife’s 401K as being “marital” property, which means that in the even of divorce, the husband would have a legal interest (and vice versa).</p>
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<p>Nope, wrong again. “Marital property” is a concept that applies in New York only when a marriage ends in divorce. It’s used solely for purposes of distributing the assets of the divorcing couple at that point. Up until then, a married couple in New York can hold their property in any form they want–as individual owners, as co-owners with or without a right of survivorship, or whatever. But if and when they divorce, all those designations are thrown out the window, everything acquired during marriage is deemed “marital property” and it gets divided up equitably. I repeat for the third time, this is NOT a question of state law. It’s federal law, ERISA, that controls here and requires spousal consent.</p>
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<p>This prevents one spouse from fleecing the other with regards to retirement. I’m not sure why you have an issue with this. If the spouses don’t agree…then the money and beneficiary remain the same.</p>
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Because if the spouse earning and saving the money wants/needs to take a loan from their 401-K, the other spouse should not be able to exercise total control over that money and what can be donen with it.</p>
<p>Zoosermom – are you saying that the spouse with the 401K plan should be able to simply waltz away with all plan assets even if that would leave the other spouse without retirement funds? I consider his 401K to be part of our marital assets. </p>
<p>In your friend’s case, neither spouse can exercise total control – probably no different than neither spouse being able to independently sell the home owned in joint tenancy. </p>
<p>Marriage involves a lot of contractual relationships. You give up your rights to operate with complete independence, and that’s part of the deal.</p>
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Waltz away? No. Borrow against, which must be repaid.</p>
<p>Here’s my personal concern. In about three years I would like to splurge on something that I’ve wanted for a very long time. It’s in the range of $5000, but I won’t have the cash because it’s something I want by myself and my husband doesn’t support. The item is a very expensive clarinet for my son for his 16th birthday. For those who don’t know, my son is 13 and is a serious, serious clarinet player. Played recently at Carnegie Hall and got a life-alteringly large scholarship to one of the best private music programs in the area. He has a nice clarinet, but it is my dream to get him the model that Benny Goodman played before he starts the college audition process. We aren’t Jewish, so there will be no Bar Mitzvah, and he isn’t a girl so there will be no Sweet Sixteen party. He wants the clarinet and I want to give it to him. My husband thinks it is ridiculous so I always planned to take a small loan off my 401-K to make up the difference and just buy it. My husband will not refuse to consent, but he will hem and haw and guilt me, because he will be two years away from retirement. He will retire at 54 but I will retire about 10 years after that. He wants to buy a place somewhere away from New York and I will stay here. In order for me to pay the bills here, I can’t have that extra loan taken from my salary and that is his objection. I have saved that money since I was 20 years old out of what I would have paid for lunch and all the extras I never had and it is a very, very large amount. I do not believe that I should have to ask anyone’s permission to borrow against it. I can understand not permanently removing assets, but the decision to borrow against it should be mine.
I can’t tell you how much I am bothered by this.</p>
<p>Do you decide annually how much you will contribute to the 401K? If so, does it make sense for you, in your particular circumstances, to start putting the money instead in a bank account with just your name on it? Or just to take it out in cash and stash it someplace?</p>
<p>Allh, if it wasn’t in my 401-k money would be in my paycheck, which is used to pay the bills. We each contribute half. Which has always worked well. Hubby has a city pension and annuity and will have lifetime medical/dental/prescription, so he doesn’t have to contribute from his paycheck.</p>
<p>But I’m not asking for advice. I am expressing anger and frustration that someone would have to consent to my borrowing my own money. I am absolutely incensed about that. Another example will be when my daughters get married. I would like to buy their gowns, but my husband thinks that is ridiculous, also.</p>
<p>zoosermom,
If you start setting aside $139 a month toward the clarinet, you’ll have $5000 in 3 years. If you borrow the $5000 from your 401(k), you’ll need to pay it back, so you’ll need to find the money to set aside for that purpose at that time. Why not just start now, leave your 401(k) intact, and not need to play catch-up later?</p>
<p>At my company, we can direct-deposit into more than one account. So you could reduce your 401k contribution and funnel the money directly into your clarinet account. Then it doesn’t show up in your paycheck.</p>
<p>Just a thought. </p>
<p>Have you confirmed with your 401k plan administrators that a loan will actually require spousal consent? There is no place on the loans forms for my 401k where a spouse signature is required.</p>
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Seems like the problem is not so much how 401k’s work.</p>
<h1>50 - sincere apologies for the unsolicited advice.</h1>
<p>I am coming late to the game on this thread - not sure if this has already been mentioned.</p>
<p>Zoose - can you simply change your future deductions into the 401K for the next three years, and put that money aside? It doesn’t solve the spousal consent issue, but if you can manage it, this might be a solution to raise the funds without penalties, loan interest.</p>
<p>Oops - cross posted.</p>
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There are serious penalties and interest payments due to the government if you do not repay your 501K funds on time. Your spouse would be liable for those interest payments and penalties whether it’s “your” money or “his”. Since he will be on the hook, he needs to consent.</p>
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Because (a) the money in the paycheck goes to household expenses. If I borrow from my 401-K (which is huge, by the way) then the deduction comes out of my paycheck before it comes home. That’s the issue. Again, I’ll work it out, but I don’t think I should have to.</p>
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Yep. Just this week, which is why I’m fussing.
Allh, no need to apologize. Advice is much appreciated. I just don’t want anyone to go out of their way.</p>
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We are talking about a very small amount of money here, so the penalties wouldn’t amount to very much in the scheme of things.</p>
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<p>The thing is, it isn’t legally “YOUR” money-it’s the zoozer ***team’s ***money. </p>
<p>Yes, you earned it, but it isn’t “yours.” In your particular case, particularly in light of the way in which you and your DH work finances, it is not playing out to your advantage. But the protections this policy offers to many people is, in the big picture, a good thing.</p>
<p>A question for lawyers: can prenuptial agreements trump federal law in this kind of situation?</p>
<p>My idea is the same as that a couple of posts up. Most companies allow you to put a portion of your check into a savings account. I am pretty sure you don’t need spousal consent to withdraw from those accounts. Especially given the fact that your 401 (k) is large, why not alter those contributions? Put ~$150 less per month (or whatever) into your 401 (k) and funnel it instead to a savings. Your take home will remain approximately the same.</p>
<p>I understand your frustration and hope it all works out well for you. </p>
<p>In a general, across the country type of view, I think it is a great protection. My H contributes 50% of his paycheck to his 401. I contribute very little to mine. This is a joint decision and how we have worked finances. I 100% consider the total balances in <em>both</em> of our retirement accounts to be joint assets.</p>
<p>I would never ever have done this had these protections not been in place. I’ve been through one H having an early mid-life crisis. While I love and trust this H, I never underestimate the possibility of an future unknown.</p>