Wife can’t share increase in retirement account value
The North Carolina Court of Appeals recently ruled that appreciation in a husband’s retirement account that occurred after a couple separated could not be divided at divorce.
The couple in question got married in 1995 and had four children together before the wife filed for divorce in 2016. According to the wife, they separated in August 2015 when the husband “willfully abandoned” her.
When they got married, the husband worked for IBM. Before the marriage, he acquired a retirement plan from IBM which he later rolled into a Vanguard account that, on the date the couple separated, was worth $412,000, of which the court deemed $100,000 to be marital property and $312,000 to be separate property. By the time of distribution, the account had increased to $496,000 ($120,000 in marital property and $376,000 in separate property). Despite that split, the court divided the entire $84,000 in passive gains, deciding that the husband hadn’t established any of this increase as separate property.
But the court of appeals reversed, finding that the trial court should have only included the $20,000 increase in the marital portion as part of the estate and ordering that it to go back and redistribute the assets accordingly.
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