What steps must be taken when a 401k is surrendered during a California divorce? 3 Answers as of February 15, 2011

In California, does the spouse need to sign the form when the proceeds are withdrawn from a 401k as an acknowledgment under ERISA or any other statutes or laws?

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Warner Center Law Offices of Donald F. Conviser
Warner Center Law Offices of Donald F. Conviser | Donald F. Conviser
Depending on the plan, a Joinder of the 401K plan may or may not be required. A Qualified Domestic Relations Order [QDRO] should be prepared, both parties and their counsel need to sign the QDRO, it should be filed with the Court for the Court to sign the Order on the QDRO, a Rollover IRA should be opened to receive the funds/assets from the 401K plan, and the Court-signed QDRO should be served on the 401K plan. Some plans require a Certified Copy of the Court-signed QDRO to be served on the 401K plan. The transfer of funds should be a direct transfer from the 401K plan to the Rollover IRA. If the funds are paid to, withdrawn by, or even touched by the recipient (as opposed to the Rollover IRA), there will be significant income tax consequences to the recipient.
Answer Applies to: California
Replied: 2/15/2011
Law Office of L. Paul Zahn
Law Office of L. Paul Zahn | Paul Zahn
You do not want to withdraw funds from a tax deferred account during a divorce proceeding. That is a taxable event. What you want to do is either do a rollover to another tax deferred account or, a Qualified Domestic Relations Order (QDRO) to move the funds. Either way is a non-taxable event and accomplishes what you want done.
Answer Applies to: California
Replied: 2/15/2011
Law Office of Curry & Westgate
Law Office of Curry & Westgate | Patrick Curry
That would depend on your pension company.
Answer Applies to: California
Replied: 2/15/2011
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