Hi -
My ex husband is $100,000 behind on his family support payments. We have come to an agreement that he will sign over his retirement account to me via QDRO. How does this work and will I be liable for taxes and the 10% penalty? Also, can I take out any of the money early to help pay bills that I need to?
Thanks!
If you are already divorced, you cannot have a QDRO entered unless it was directed in an equitable distribution order or in a separation agreement and there is now a breach of contract issue.
If you are not already divorced, a QDRO can be entered pursuant to an equitable distribution claim which transfers retirement assets to the other spouse without taxes or penalties against either spouse. However, the receiving spouse will incur taxes and penalties if he or she withdraws any of the retirement assets before reaching retirement age.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
I am already divorced and this QDRO will be to satisfy arrears that the courts have ordered my ex husband to pay. He has given me this as a settlement agreement to satisfy his debt to me and my lawyer and his lawyer are handling the paperwork. I am just confused as to whether or not I will be subject to the 10% penalty if I make a withdrawal to pay off some bills created by his non-payment. I know I will be responsible for the taxes on any withdrawals, but I am concerned about the 10% penalty.
Thanks!
If you have a QDRO entered and retirement assets are transferred to you, the transfer will be tax free and without penalty. If you later withdraw funds from the amount transferred to you, you will be subject to taxes and penalties assuming you are not of retirement age at the time of the withdrawal.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.