QDRO in 401(k) Plans/Insurance

[Guest Frank Jackson]

Does the transfer to a former spouse of a life insurance policy contained in a qualified retirement, pursuant to the terms of a QDRO, qualify as an exemption to the "transfer for value"? I am looking for a citation that specifically references the transfer of a life insurance policy pursuant to a QDRO.

Thanks.

[Guest Paul McDonald]

I haven't found an exception. I believe it is recommended that you should use another method of getting the insurance contract to the spouse (soon to be former?) prior to the completion of the divorce process. E.g..have the participant discontinue having their account balance invested in life insurance, trigger the ability to sell the contract to the participant for the cash surrender value, participant buys the contract and "gifts" it to the spouse.

I would assume the "soon to be former" spouse would not object to rearranging the disposition of marital property to avoid the tax issues involved with a transfer for value of a life insurance contract.

Anyone else found something to qualify as an execption to the transfer for value rule?