Non-divorce QDRO question

[Guest021417]

I posted this in a smaller sub-forum of my local forum. Interested if anyone has any experience with this.

I thought I would ask this in a smaller forum before posting in the National section or asking Shyster John

Does anyone have, or has had, experience in splitting assets via a QDRO without getting a divorce? I have started getting into alternative investments and need to unlock the value of my 401K without wanting to pay penalties or taxes.

This is what I have heard proposed but can't seem to find anyone with experience in this.

1. Open a SDIRA (self-directed IRA) in my wife's name. (Probably using Quest IRA, are there others any better?)

2. Get a lawyer and judge to draw up and execute the QDRO and present it to the plan sponsors of my 401K directing a percentage (90%?) to go to my wife's SDIRA.

3. Once there, I would direct the alternative investments to make.

I am not worried about putting this in my wife's name because if the QDRO was directed via a divorce she would get a hell of a lot more. So please leave comments directed to the process only. Tax implications, if applicable, should/can be addressed but we file jointly and being in a SDIRA should limit most tax implications. I know the UBIT tax may apply for our investments.

I have heard to expect a lawyer to cost $2,500 and another possible $500 for filing fees.

[ck1942]

Potential significant tax and financial issues always exist when trying to "unlock" any gov't approved deferred tax shelters such as IRAs, 401Ks, etc.

Probably best to seek advice from only a tax attorney and CPA experienced in such actions. Depending on the Plan's sponsors rules, action may not be practicable.

Ultimately, you may even need a private letter ruling from the IRS, which, of course, also alerts the service to the potential issues.

Experienced tax practioners may be aware of successes that lesser folks cannot easily uncover.

[Unique_Carpenter]

Originally Posted by ck1942

.... best to seek advice from only a tax attorney and CPA experienced in such actions. Depending on the Plan's sponsors rules, action may not be practicable....

This ^^^^^
And a qdro is useless unless the plan actually allows the type of transaction proposed.

Btw, even in what some would think a straightforward divorce qdro, it's fairly common for a "plan" to reject them on the first go round if there's something in the qdro that conflicts with the plan, or something is left out of the qdro that the plan requires.