401k rolled into IRA after marriage

If a largely pre-marital 401K is rolled into an existing IRA during the marriage (money rolled over, not securities), and then securities are purchased with this money, is it considered active trading during the marriage and is therefore marital?

The IRA that you describe will be part separate property and party marital property.

If the rollover premarital funds can be traced and distinguished from the marital funds earned during the marriage, then the premarital funds will not be considered in equitable distribution. However, this may be tricky, or impossible, to determine if passive gains on the account are earned on the premarital funds or the marital funds, especially if marital funds were continued to be added to the account.

If the premarital funds and passive gains/losses on the premarital funds cannot be distinguished and it is impossible to trace, then the whole account would likely be considered marital property as it existed on the date of separation.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

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