My wife and I are separating cooperatively, and are in the process of dividing assets. I have requested half of her 401(k) and she has agreed. The money in this account is practically the only savings we have, and as it is a retirement account, they are fairly illiquid.
In order to move out of the marital residence I require access to those funds. I understand that a QDRO is necessary to divide the funds with the fewest tax implications. My question is twofold. First, what is the timeline for filing a QDRO; and second, how soon may we divide the 401(k) funds and divest ourselves of one another?
One final question: how are the funds to the payee spouse distributed? I do not have a 401(k) myself, and as stated above, our liquid assets are not sufficient enough for me to establish myself.