Jump to content

Can QDRO be structued as loan?


Guest Willy235

Recommended Posts

Guest Willy235

Assume a defined contribution plan that allows loans. If a domestic relations order provides that the plan will loan the alternate payee $200,000, can this be a QDRO? The main issue is, I believe, whether this arrangement violates the requirement of Code section 414(p)(3) that the order not require a "type or form of benefit . . . that is not otherwise permitted by the plan." The plan would permit a loan to the participant, but obviously couldn't do so for more than $50,000.

I don't think this works, but am interested in the opinion of others. Thanks.

Link to comment
Share on other sites

Guest Willy235

Thanks for your input. The alternate payee is the ex of a trustee, but there is nothing sham about this divorce, to put it mildly. It would obviously be much easier, not to mention clearly legal, to provide for straightforward payment to the alternate payee. In case you are wondering, the reasons to consider this more convoluted approach involves tax liens against the participant.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...