I am recently divorced the judged ordered that I cash out my 401k and after taxes and penalties split with my ex 50/50. I am fine with this and agree with the order. I contacted one america my 401k holder and explained the situation. They said they will not cash out my 401k because erisa law trumps my court order. They did however say they would take fifty percent and put it in an account for my ex. My ex has been against this from the very beginning that is why it was ordered to be cashed out. Can one america refuse to cash out my 401k?? I understand I will have to pay penalties and taxes and am fine with that.
1 Answer from Attorneys
Yes. They can refuse to "cash out" a 401k under certain circumstances. Contract law and Federal law "trump" a State court order. However if 50% of the account is transferred to your ex pursuant to a QDRO ("Qualified Domestic Relations Order") then he has a better chance to cash out his share.
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