Opinion ID: 2179268
Heading Depth: 1
Heading Rank: 4

Heading: Division of Trip's Retirement Account.

Text: In its decree, the trial court divided the parties' joint property and debts, awarding Trip's retirement account entirely to him. In order to equalize the division of assets and liabilities, the court ordered Trip to make a cash payment to Tamera of $5276. In his cross-appeal, Trip asserts the court should have awarded Tamera a share of Trip's retirement account to equalize the property division, rather than making him responsible for a cash payment to Tamera. He claims that the retirement account carries an income tax burden that now rests entirely on him, whereas none of the assets awarded to Tamera carries any tax consequence upon liquidation. See generally Iowa Code § 598.21(1)( j ) (instructing the court to consider [t]he tax consequences to each party in dividing the property of the parties). Tamera responds that it would be inequitable to make her wait to retirement to obtain her share of this asset. We initially observe that the parties expressly removed the matter of tax consequences from the trial court's consideration in their pretrial stipulation, which states: The parties agree that no tax consequence issue needs to be addressed by the Court. This issue was apparently removed from the court's consideration because both parties contemplated that the retirement account would be divided between them after adjusting for the value of the account earned by Trip prior to the parties' marriage. During trial both Trip and Tamera testified with respect to their personal wishes as to the disposition of each asset, stating their preference for who should be awarded each particular item. As to the retirement account, they both testified they wanted it to be divided equitably between them. Despite Tamera's protestations on appeal that she should not have to wait until retirement to obtain her share of this asset, she appeared quite willing to do so at the time of trial. We turn, then, to a consideration of the fairness of the court's award of cash to Tamera in lieu of a share of Trip's retirement account. Although Tamera correctly points out the court did not order Trip to liquidate his retirement account, there are no other assets that Trip has at his disposal that would be sufficient, alone or in combination, to make the cash payment to Tamera required by the court's decree. Consequently, as a practical matter the court's property division will require Trip to liquidate some portion of his retirement account with the attendant penalties of early withdrawal. Cf. In re Marriage of Hayne, 334 N.W.2d 347, 353 (Iowa Ct.App.1983) (affirming valuation of retirement account without any depreciation for potential tax liability, noting court did not order liquidation of account and it was evident that respondent had other assets available to meet the court's orders without liquidating it). Therefore, we think a fairer division of the parties' assets would eliminate the cash payment and substitute a $5276 share of Trip's retirement account to Tamera. Consequently, we remand this case for the preparation and execution of the required documents to accomplish this transfer.