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Delta-Lawyer
Delta-Lawyer, Attorney
Category: Legal
Satisfied Customers: 3546
Experience:  10 years practicing IP law and general litigation
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I am in the start of mediation. We have always maxed out my

Customer Question

I am in the start of mediation. We have always maxed out my wifes 401K. She cashed out the 401K and believe have set up a college fund for my son with it. Is this legal?
Submitted: 1 year ago.
Category: Legal
Expert:  Delta-Lawyer replied 1 year ago.

Yes, it is legal. However, in most cases, the person whom is cashing out or drawing down on the 401K will have to pay early withdrawal fees and taxes. That said, the person that wishes to take this action can request what is called a hardship withdrawal. The hardship withdrawal for educational purposes will waive most of the fees, etc. However, you have to be able to show the hardship...i.e., you cannot pay for your child's college otherwise. You normally have to submit financial statements, an affidavit, etc.

Let me know if you have any other questions.

Please also rate my answer positively (4 or 5 stars).

Best wishes going forward!

Expert:  Delta-Lawyer replied 1 year ago.

Let me know if you have any other questions or comments. I want you to be comfortable moving forward.

Expert:  Delta-Lawyer replied 1 year ago.

Let me know if you need anything else. Thanks

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