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What does the plan say?

"I have seen too many times where RE in a plan ends badly." My two cents worth: I have RARELY seen any time where RE in a plan ends well.... Appraisals, RE tax, UBIT, liability insurance (or just liability...), management (someone has to collect rents, pay bills) and the like complicate ownership. Add to that there may be built in tax advantages to owning real estate that get lost due to holding the real estate in a plan (cap gains can get turned into ordinary income, depreciation is lost as a current deduction in a plan, etc...).

The spouse can do a rollover to the spouse's own IRA, but if the benefit stays in the Plan, it stays in the name of the Participant FBO the spouse The spouse would then take RMD's from the account. For the year the Participant died, the RMD is based on the Participant's age. If the Participant already took an RMD for the year in which the Participant died, then no additional RMD is required for that year. For the following years, the RMD is based on the beneficiary's age each year. edit: or the spouse could choose the 5-year rule for the distribution.

The lease sounds like a clear Prohibited Transaction unless these is a DOL exception I am forgetting about. The purchase and co-ownership sounds like a PT also to me. PTs are not my area of expertise I will admit so another person might chime in and add value. However, it it clear to me that in both cases those are the rules you want to research. As an aside just do a search on the words "real estate" on this board and you will get threads describing all the reasons why real estate in a qualified plan is a bad idea. I have seen too many times where RE in a plan ends badly.

Thank you for the further perspective. Perhaps the SEC might answer the lobbyists' call for symmetry by requiring a broker-dealer that advises a "retail" investor to state a legally enforceable obligation to provide advice in the investor's best interest.

Such a petition could not force a distribution not otherwise allowed by the plan. Lou S.'s suggestion to reject the petition as failing to meet the standards of a valid QDRO is well made. With the notification of the rejection, send the plan's QDRO procedures and any model QDRO the plan may have. Best of luck and May the 4th Be With You. (Couldn't resist.)