Alternate Payee is minor child & Award is college $?

[Guest Amy Marie]

A participant in a DC (401(k) profit sharing) plan and their ex-spouse have agreed to split the ppt's account balance in the 401(k) 50/50. They have also agreed to take $10,000 each and save it for their child's education (minor child). Neither party trusts that the other will actually come up with the $10,000.

They want the ex-spouse's $10,000 to come from their awarded portion of the 401(k). Likewise, the ppt needs their $10,000 to come from the plan as well. So if the ex-spouse is the alternate payee under the DRO and half of the ppt's vested balance is $50,000, the AP will be awarded $40,000 and the remaining $10,000 will be for the child. Can the DRO state that $40,000 will go to the ex-spouse named as AP #1 and $20,000 will go to the child named as AP #2 ($20,000 with the thought that $10,000 is coming from each parent)? Since the child is a minor does a legal guardian have to be named in the DRO? Can the legal guardian be the participant?

Any guidance is greatly appreciated.

[Guest Sieve]

Multiple alternate payees can be named in a QDRO. What they get under a QDRO is what they get.

Whether a guardian must be appointed for a minor child to receive these amounts will depend entirely on state law.

[QDROphile]

The participant gets to include the amount distributed to the child AP in the participant's income. The after tax economics are not 50/50, and don't forget to take withholding into account. The withholding is credited to the participant.