When my ex husband and I divorced I agreed to let him keep his 401k?

Question

I let him keep his 401k on the condition that he pay me the tax consequences that I received for taking it out for him. He has never paid me for this.I do not want to go into great detail...I want a straight basic answer from a professional. Where do I go from here? Does The Friend of the Court address this?

Answer 1

What he should have paid should have been detailed in your property settlement agreement.  If you had an attorney he or she should have taken care of it.  If the case is closed, it may too late for you.

Answer 2

If he kept it in the 401k or directly transferred it to an IRA there should have been no tax.  And if it was his 401k, how did "you" take it out for him?  Any tax or penalties should have been his, or if there was withholding (20% required if eligible for rollover) from a distribution, that would have partly covered the tax.

Since details are incomplete and do not make sense, have you talked to your lawyer?

Answer 3

let me see if I have this right...you have a judgment of divorce.  In that judgement you have written that you both will obtain a QDRO directing transfer of a set amount to you and should you withdraw it that he will be responsible for any tax consequences.  But you also have it written that you will transfer the cash proceeds from that liquidation BACK to him?    In essence cheating the govt out of taxes because you're in a lower tax bracket than he is?  And a judge signed off on it?  WOW!!!  

If that's the case then you can file a motion of contempt with the court and MAYBE get relief.  Because no matter what the court order/divorce decree states...as far as the IRS is concerned you are responsible for the taxes.  

Sorry, I'd consult an attorney on this one.

Answer 4

What do you mean? Was the 401k closed? Was it rolled over into a new 401k? If it was closed are you sharing in the taxes and penalties?