Financial Advice On Divorce: Post-Divorce Tax Consequences

Question:divorce lawyer Carrie Westbrook

I am looking for financial advice on divorce regarding tax liabilities.

We divorced in late 2010, but filed taxes jointly for the final time that year. I had withdrawn money from my 401k to cover the legal costs of our divorce. In our divorce decree, she waived any right to my 401k money.

But because I withdrew money from my 401k, my ex-wife is claiming that increased our taxes and liabilities and she is now looking to get money from me for the tax consequences.

Can she come after me for more money after she willingly signed off on the tax return?

Answer:

I am not licensed in your state so I am unable to give you legal advice on divorce. I can give general divorce help for men, though.

I would have to review your divorce decree to answer your tax question accurately because it all depends on what the decree says.

If the decree divided all of the property of the parties and specifically addressed the issue of how tax liabilities for 2010 were to be split, whether it be 50/50 or some other way, it is possible you would have a good defense to her trying to come back after the fact and alter that.

In most states, she would have been required to appeal the judge’s decision on those issues within a certain time period — usually 15 or 30 days maximum — or she would be said to have waived any complaint.

If the decree failed to address those issues, she may have some wiggle room to make those arguments depending on the language of the decree.

You would have to be cautious about additional or “catch-all” language in the decree that could work against you, such as if the decree provided that you were to indemnify her for any and all tax consequences related to any actions you took (that could include a withdrawal from a 401k).

In short, the language of the decree is what would control, so the fact that she signed off on the tax return itself is not necessarily determinative.

I have only provided you with general legal information. For a more in-depth answer and financial advice on divorce, you should contact a family law attorney licensed in your jurisdiction.

Cordell & Cordell has men’s divorce lawyers located nationwide. To schedule an appointment with a divorce attorney, including Carrie H. Westbrook, an Associate Attorney in the Colorado Springs, Colorado office, please contact Cordell & Cordell.

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