My situation is like this. My ex cannot afford the child support and alimony. And the judge had a tentative decision as below.
SITUATION AS BELOW ==============
In light of Defendant’s current financial circumstances, Plaintiff shall receive and thereafter
retain 100% of the 401K/retirement assets in Plaintiff’s name, which total approximately
$100,000. Plaintiff shall utilize Defendant’s 50% share of the account for the alimony and
child support obligations from the effective date of the obligations, per Paragraphs
2 and 3 of this Order, until no more funds remain in Defendant’s 50% share of the assets to
cover the support obligations. When no more funds remain in Defendant’s 50% share of the
retirement accounts to cover the support obligation, then Plaintiff or Defendant may file the
appropriate motion with the Court at that time to address support. Within 30 days of the
date of the execution of this Settlement Term Sheet, Defendant shall timely sign all
documentation necessary to transfer 100% of his retirement accounts to Plaintiff. Plaintiff’s
attorney shall provide Defendant with the documentation for the company that will prepare
the Qualified Domestic Relations Order to transfer the retirement accounts to Plaintiff and
Defendant shall cooperate and timely sign the documentation.
I got confused and my questions are these:
1. He /Defendant will use his portion of 401k to pay the child support and alimony, say total $2,000 each month. The tentative settlement is that all funds will be transferred to my/Plaintiff 's account, but when I withdraw the money to use as the child support and alimony, it will trigger tax liability for me, but actually child support and alimony are non-taxable. What I mean is paying tax is ok, but that is his liability. If I pay the tax for the withdrawal, the tax should be included in his portion of 401K, which means his portion will cover fewer years for Child Support and Alimony. Can I receive the distribution from the provider each month which is grossed up with the tax that I am supposed to pay on the tax return in the future? That's to say the monthly distribution should be $2000+ tax. Is this workable?
2. Actually defendant's 50% of 401k / his portion is not sufficient to cover 10 years' child support and alimony, how can I track the remaining amount of his portion ( $50K) if 100% ($100K) of the 401k is transferred into my account ( my own 401k or ira etc) and mixed together?
Is there any way that can work all these out?
