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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Family Law
Satisfied Customers: 19113
Experience:  B.A.; M.B.A.; J.D.
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Can I spend retirement account for my debts that accumulated

Customer Question

Can I spend retirement account for my debts that accumulated during divorce by paid legal fees. I am still in divorce, not finish yet.My spouse has been spending equitable distribution for his legal fees, other expenses.
I still need legal fees to retain attorney and pay acclimated tax that I could not pay.
Submitted: 2 months ago.
Category: Family Law
Expert:  Michael Gonzalez replied 2 months ago.
Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.You may be able to do so up to half the amount in the account (presuming the other half is your spouse's per equitable distribution). Consult your family law attorney to protect your rights and interests.It is unlikely you could avoid the taxes on distributions from tax-deffered accounts such as IRA, however, there are strategies to avoid the 10 percent penalty if you are under 59 andn1/2 years of age. Consult your accountant to see if you can take advantage of these options to avoid the penalty.
Customer: replied 2 months ago.
Under 59.5? Not over 59.5?What is New York law? I need to know.My spouse has spent equitable distribution that he can access.
Expert:  Michael Gonzalez replied 2 months ago.
Over 59.5 then there will not be the 10 percent penalty.I am not licensed in NY. I am licensed in Florida which also has equitable distribution.I will opt out and allow another attorney to help you. Please do not rate or respond and Good luck.
Expert:  Michael Gonzalez replied 2 months ago.
If under 59.5 then there are possible strategies to utilize to avoid the 10 percent penalty BUT not the taxes.
Expert:  Phillips Esq. replied 2 months ago.

Hello: This isCustomer Welcome to Justanswer! I will be further assisting you with your post.

Expert:  Phillips Esq. replied 2 months ago.

The under 591/2 rule is pursuant to IRS Code and not New York Law. You would be subject to 10% penalty for the withdrawal under the circumstances. Click here for more information. However, you can withdraw as much as you want for your litigation expenses if your spouse is doing the same thing--if he using his property subject to equitable division to pay for his litigation expenses. Equitable does not automatically mean 50/50 eventhough the result may ultimately be 50/50. It could be 100/0; 90/10; 80/20; 70/30; 60/40; 50/50 depending on the review of factors. See New York Domestic Relations Law Article 13 Section 236 Part B subsections c and d:

http://law.justia.com/codes/new-york/2016/dom/article-13/236/

Goodluck with your case,