Transfer of 457 Account

"R. Pile" wrote

If done wrong, the husband gets stiffed with the tax bill.

So, talk to the husband's attorney and get a QDRO - Qualified Domestic Relations Order. They'll know what you're talking about, and if not, find another attorney who does.

The QDRO splits the pension with no current tax implications. What she does with it after that is her call.

She needs to talk to her legal and tax advisors.

He needs to do the same.

The U.S. Supreme Court has a case, "Kennedy v. Plan Administrator for Dupont Savings and Investment Plan," scheduled for argument on its fall docket. The issues at controversy in the Kennedy case are not precisely on point with your question but they do validate Paul Thomas' advice about making certain your arrangement is crafted carefully and follows legal requirements.

You can read a synopsis of the Kennedy case on the second page of the link pasted below.

See: "Qualified Plan Queries: Supreme Court to Examine QDROs as the Only Waiver to Retirement Benefits"

Condor

About how much does it cost?

To add to Paul's reply: It is important that the QDRO not only comply with federal law but it must also comply with state law. Every state that has a 457 plan will have a statute on the books and corresponding rules and regulations for their 457 plan. Buried in those rules & regulations will be the requirements for a valid QDRO.

To talk to an attorney? Probably cheaper than the tax on the distributed amount if it's done wrong.