Division of 401(k) Assets
Wilson v. Wilson, Elizabeth Conant & Scott Church (9/10/2020) LC No. 18-000868-DO No. 349234 Mich. Ct. App.
Plaintiff appealed the trial court’s divorce judgment, challenging the decision to award each party their respective 401(k) accounts. The Michigan Court of Appeals affirmed.
Summary per Case: Plaintiff married the defendant in October 2015, and filed for divorce in April 2018. The parties were both employed by Consumers Energy. Plaintiff had worked for Consumers for six years and the defendant had worked for Consumers for 26 years. Before their marriage, they both contributed to 401(k) plans that were managed by Fidelity Mutual. During their marriage, they both contributed $18,500 annually, the maximum amount allowed by federal law.
The Court of Appeals concluded: under the circumstances of this case, the trial court’s decision to award each party their own appreciated 401(k) plan was fair and equitable. As the trial court noted, both parties contributed the same amount of marital funds—$18,500a year—toward their respective 401(k)accounts during the marriage. The fact that defendant’s account grew more than plaintiff’s account was simply because he had substantially more in his account before the parties were married. There was no evidence that either party did anything else to cause the significant growth of defendant’s 401(k) account. In other words, it would have achieved the same growth even if the parties were not married. And plaintiff’s 401(k) account also appreciated during the marriage through the use of the exact same amount of marital funds. The amount of appreciation to their respective 401(k) accounts was in proportion to the value each had as premarital assets. But contrary to the case relied upon by plaintiff in support of her argument, McNamara v Horner, 249 Mich App 177, 184; 642 NW2d 385(2002), both plaintiff and defendant in our case contributed identical dollar amounts of marital income toward the growth of their personal 401(k) accounts during the marriage. Under the circumstances of this case, by awarding each party their own appreciated 401(k) accounts, the trial court achieved a fair and equitable settlement. See Hodge, 303 Mich App at 555.