Expert: Allen - 7/22/2009

Question
My husband and I separated, and I want to borrow money from my retirement to purchase a home. My husband refuses to sign the loan papers and I do not want him on the loan anyway. My job is telling me that he must sign the papers (IRS law), anything I can do to get around this?

Answer
The plan administrator is probably correct. The law says that there must be spousal consent under most circumstances.

There are a few exceptions:

1. If the plan is a profit sharing plan (a 401k plan is considered a profit sharing plan) then the plan document CAN (not must) say that spousal consent is not required. However, this language must be in the plan document. If the plan is a pension plan, then spousal consent is always required except as stated in 2.

2. If the plan document requires spousal consent and you are legally separated and there is a court order saying this, then the plan document CAN (not must) say that spousal consent is not required.

Sorry that I can't give you a better answer.