For a separation/divorce how does a QDRO work?
I’ve got about 115k currently in my 401K
28K of it is in loans.
I’m planning to separate in the next few months. I’m looking for a new place to live now.
What are the options for the 401K?
I plan to move out and leave her the home once the streamline is completed. This will reduce the monthly payment about 300
I need to find a roommate to split an apartment with, otherwise I can not afford it
For my 401K, I heard I need a QDRO. So if I take the 115K and divide it by 2. That’s 57500 she will recieve.
This QDRO stops the penalty for her correct?
Can I give her the 57500, and state she needs to give me 14K of it for 1/2 of the loans?
Can I disburse my 401K 100%, and make her give me 1/2 of that. This would allow me to obtain a place of resident’s and remove any financial burdens with the divorce
And she can also do the same with her half.
I know wiping one’s 401K plan is not a good option. But if it is possible it will relieve the financial burden associated with a divorce.
This QDRO stops the penalty for her correct?
- Yes, but a QDRO splits the 401k into another account, it doesn’t “cash it out”. There are still penalties for cashing it out.
Can I give her the 57500, and state she needs to give me 14K of it for 1/2 of the loans?
- I believe if the loans were marital in nature than she would liable for half.
Can I disburse my 401K 100%, and make her give me 1/2 of that.
-I think you’re going to get slapped with some heavy heavy fees for taking out of your 401k early.
There are a lot of options for asset distribution. It’s all up to whatever you two agree on and if you are unable to agree, whatever a judge decides. Assets or debts that are marital are split equally and property that is separate is separate.
If you do a QDRO, and then she withdraws the money, the penalty for early withdrawal is waived, but she still has to pay taxes on the money. Either of those withdrawal options are possible.
So I could do 100%? Which would help financially with the divorce.
When is this done? Legal Separation or after 1 year at time of divorce?
Yes, you can do 100%. You can do it at any point in time after separation.