QUESTION

My x owed me $28,000 property settlement and $9,000 spousal support. He has no money so he asked our mediator to do a QUADRO. On several occasions I asked both x and mediator who would be paying the taxes on the $28,000 and they assured me that it would not be me. In fact, the mediator told me that the taxes would be withheld on the $28,000 by federal law at the time of the disbursement but that I would "get a big tax refund". Guess what" No tax refund, it is ALL taxable to me. What went wrong, how can I fix this?

Asked on Feb 25th, 2011 on Family Law - Minnesota
More details to this question:
My x owed me $28,000 property settlement and $9,000 spousal support. He has no money so he asked our mediator to do a QUADRO. On several occasions I asked both x and mediator who would be paying the taxes on the $28,000 and they assured me that it would not be me. In fact, the mediator told me that the taxes would be withheld on the $28,000 by federal law at the time of the disbursement but that I would "get a big tax refund". Guess what" No tax refund, it is ALL taxable to me. What went wrong, how can I fix this?
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1 ANSWER

William/J Joanis
It sounds like either you misunderstood the mediator, or you were given bad advice.  The QDRO transferred the IRA or 401K, or whatever, to you.  At that point it was yours.  The tax advice was wrong.  Why the mediator got involved in giving any advice is a mystery, as the mediator is supposed to be totally neutral and is not to give advice.  Now you need to collect what you can from the ex to get yourself current, which may or may not be possible at this point based on what you signed.  Where was your lawyer in all this?  It would not have involved more than an hour or two to have reviewed this and advised you and made him liquidate the asset and be responsible for the taxes.  Plus, you would have saved the cost of having the QDRO drafted and filed.  Also, as far as your ex having given you bad advice, I suspect this was not the first time he let you down, or shouldn't have been believed. Get a lawyer and get your ex back on the support wagon.
Answered on Aug 14th, 2011 at 6:25 PM

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