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CFLS > Retirement Accounts > Flashcards

Retirement Accounts Flashcards

1
Q

Employee benefit plans include public and private _____ whether or not qualified under ERISA.

A

retirement
pension
annuity
savings
profit sharing
stock bonus
stock option
thrift
vacation pay
and similar plans of deferred or fringe benefit compensation

Fam. Code 80

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2
Q

Pension rights, whether vested or non-vested, ______ and are subject to property division.

A

are NOT mere expectancies

Marriage of Brown (1976) 15 Cal.3d 838

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3
Q

Retirement benefits attributable to ______ are CP. This is based upon when it is _____. Even if received after DOS or unvested at DOS, there is still CP.

A

service rendered during a marriage

EARNED not when it is received

Marriage of Green (2013) 56 Cal.4th 1130

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4
Q

Post-DOS opportunity to realize income from ____ should be disclosed on PDDs.

A

CP options

Fam. Code 2102(a)(2)

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5
Q

Failure to disclose insider information when barred from doing so under securities law is _____.

A

NOT a basis for an alternate valuation date

Marriage of Reuling (1994) 23 Cal.App.4th 1428

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6
Q

Allows officers and directors of public companies to trade using a ______ per a written plan on a specified date, regardless of the stock price on that date OR grant a third party to the authority to make the sale within a designated period.

A

pre-planned sale of stock

Rule 10b-5

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7
Q

The benefit plans can be _____ when either party claims an interest.

A

joined

Fam. Code 2060

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8
Q

Every request for joinder of employee benefit plan must be submitted using _____.

A

FL 372 (request for joinder of benefit plan)
FL 370 (pleading on joinder benefit plan)
FL 375 (summons), and
blank FL 374 (notice and response)

CRC 5.29

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9
Q

The right to buy a number of shares for a particular price by a certain date.

A

Stock options

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10
Q

When the employer gave the options to the employee

A

Grant Date

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11
Q

When the employee can buy the options

A

Vesting Date

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12
Q

The date the options are purchased

A

Exercise Date

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13
Q

Options granted but work must still be performed to vest

A

Unvested

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14
Q

Vested but have not been used to purchase the stock

A

Unexercised

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15
Q

There is still time to purchase the shares per the contract

A

Unexpired

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16
Q

Companies may prohibit stock trades during certain periods around key events, prohibit employees from capitalizing on MNPI, and avoid the appearance of insider trading.

A

Blackout

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17
Q

Plans that are “statutory” or “qualified” plans which generally have better tax treatment under _____

A

IRC 421 and 422.

Incentive Stock Option

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18
Q

No “income” for tax purposes shall result at the time of the transfer to the individual upon his/her exercise of the option IF had stock _____. The exercise must occur ____.

A

(1) one year after the exercise date AND (2) years after the grant date

during employment or within 3 months of leaving the company

IRC 422

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19
Q

Transfer to a non-employee spouse in connection with a divorce _____ an option as an ISO.

A

disqualifies

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20
Q

The non-employee spouse will be taxed on the ____ while the employee ____ taxed on the benefits paid to the former spouse.

A

amount received

is not

Rev. Rule 2002-22 & 2004-60

21
Q

Stock options may not have value if _____ is higher than the trading price.

A

the strike price

22
Q

Even if the employee purchases the stock at the strike price, it may still be subject to _____ if the employment ends.

A

forfeiture

23
Q

Where a spouse must continue to work after DOS for a period of time to allow vesting, the court should apportion benefits based upon pre-DOS and post-DOS time worked to vest.

A

Apportionment

24
Q

The court may accept any reasonable method of apportionment if it is ______.

A

representative of the CP and SP contributions

Marriage of Sonne (2010) 48 Cal.4th 118

25
Q

Common Methods of Apportionment

A

(1) Time Rule;
(2) Modified Time Rule; and
(3) Cash + Service Contributed

26
Q

Time Rule

A

(Time benefit accrued between DOM and DOS) / (Total time benefit accrued)

27
Q

When the employer _____ with an option contract, apportionment of unvested stock options (at DOS) involves the period from the date of grant to the date the benefit vests i.e. CP would be date of granting to date of separation and SP would be date of separation to date of exercise.

A

incentivizes future performance

Marriage of Nelson (1986) 177 Cal.App.3d 150

28
Q

When the employer _____ with an option contract, apportionment of unvested stock options (at DOS) involves the period from the date of hire to the date of vesting.

A

incentivizes new hires or past performance

Marriage of Hug (1984) 154 Cal.App.3d 781

29
Q

When stock is restricted by a _____, apportionment is the date of grant until the date of forfeiture expires.

A

forfeiture period

Marriage of Harrison (1986) 179 Cal.App.3d 1216

30
Q

IRC 1041 only applies to _____ who redeem stocks. The _____ who redeems stock through the corp. would not qualify under 1041.

A

owner spouses

non-owner/employee spouse

Reg. 1.1041-2

31
Q

The right to receive shares of stock after continued employment. They generally vest in yearly “tranches” i.e. 100k in 2019, 100k in 2020, 100k in 2021

A

Restricted Stock Units (RSUs)

32
Q

Allocated to the party receiving the benefit.

A

RSU taxes

33
Q

Allows for taxation on the value of the RSU at the ____ rather than waiting for ___. It generally creates substantial tax savings.

A

grant date

vesting

Section 83(b) election

34
Q

A portion of current wages are deferred to the future (taxes not paid until actually receiving the funds).

A

Deferred Compensation Plans

35
Q

The court shall make whatever orders are necessary to ensure that each party receives his/he full community share in any retirement plan, including _____.

A

survivor and/or death benefits

Fam. Code 2610

36
Q

Generally require QDRO for in-kind division

A

ERISA plans

37
Q

Pension, Annuity, etc. to be paid out in monthly payments upon retirement.

A

Defined Benefit

38
Q

401k, 457, etc. to be divided in lump sum

A

Defined Contribution

39
Q

Do not require QDRO for in-kind division

A

Non-ERISA

40
Q

Similar to defined contribution but NOT subject to ERISA

A

IRA

41
Q

Alternate payee subject to a QDRO may receive money from a qualified plan without ______.

A

having to pay the 10% tax penalty

IRC 71(t)2(c)

42
Q

Alternate payee avoids 20% income tax when there is a ______

A

direct transfer of a lump sum distribution to another retirement plan (i.e. IRA) with no payment going to the alternate payee.

IRC 401(a)(31)

43
Q

Non-employee spouse may elect to take an immediate distribution of his or her CP share of vested retirement benefits even if the ______. However, non-employee spouse may be giving up ____.

A

employee spouse elects not to retire at the earliest retirement age

increased payments in the future which may accrue due to increased age, longer service and a higher salary

Marriage of Gillmore (1981) 29 Cal.3d 418

44
Q

The state court, under the Retirement Equity Act (REA) of 1984, has jurisdiction to QDRO retirement accounts and the plan administrators are bound even if ____.

A

not joined to the case

Marriage of Baker (1988) 204 Cal.App.3d 206

45
Q

Parties cannot unilaterally _____ to transmute otherwise CP into SP where purpose was to replace _____.

A

“elect” disability pension

retirement pension but at a higher amount

Marriage of Stenquist I (1978) 21 Cal.3d 779

46
Q

Recognizes military retirement benefits ____ and a state court may divide them pursuant to state law BUT cannot exceed ______.

A

as marital property

½ and must have been in the military for at least 10 years DURING the marriage

Uniformed Services Former Spouses’ Protection Act (USFSPA) 1982

47
Q

The court may address ____ from a judgment and retains jurisdiction as an omitted asset.

A

unmentioned military retirement accounts

Marriage of Henn (1980) 26 Cal.3d 323

48
Q

The Supreme Court determined that _____ regarding division of military benefits. This is the case that caused USFSPA to be passed the following year.

A

federal law preempted state law

McCarty v. McCarty (1981) 453 U.S. 210

CFLS (16 decks)

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