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My brother-in-law and sister-in-law are getting divorced. His 401(k) will be split between them, according to the settlement.

They were under the impression that she could get some of the money out of the plan, penalty-free (though paying the taxes on it). Then, someone told them that wasn't possible and they've asked me if i knew of any way to make it happen.

I've asked a few seasoned tax pros about it - because i couldn't come up with anything that would satisfy my ILs immediately* - and they all agreed with whatever someone told BIL and SIL in the first place: No dice.

So, as i complete my research for them, i thought i'd check with the gurus here to see if you all have anything to add. TIA.




* My only thought was a 401(k) --> Traditional IRA rollover --> Roth conversion --> wait five years to withdraw money penalty-free.
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