This all would depend on what type of debts you are paying down. Is it joint debt? If it was debt you both incurred for items you both took benefit from during the marriage, should be no problem. If you furnsihed your man-cave with all of this debt and you are keeping the man-cave intact, may be a problem
Withdrawing 401(k) funds can be exceedingly expensive if done early. You could be triggering a huge tax bill. Anything done without consulting and reaching agreement with your spouse is subject to allegations that you acted in bad faith. I would follow the advice of experienced divorce counsel rather than concoct a plan on my own.
If you find an answer helpful please mark it as such or as the Best Answer. You have asked us to state an opinion based upon stated facts. You have not provided us with any documents, pictures, witness statements or other admissible evidence. The opinions stated are based upon general principles of law unless otherwise stated, which may or may not be applicable in your jurisdiction. Controlling law is also subject to change or reversal at any time. Any such changes may be retroactive and could significantly modify the statements and opinions expressed herein. Similarly, any change in the facts and assumptions upon which this opinion is based could modify the conclusions. We opine only as to matters expressly set forth, no opinions should be inferred as to other matters or to treatment of matters not specifically addressed. This opinion represents our best judgment as to the probable outcome of the issues discussed and is not binding on the courts or upon your adversaries. We can give no assurance that an adversary would not challenge our conclusions and prevail in the courts in a manner to cause adverse consequences. With respect to some of the matters discussed in the opinion, existing legal precedent may provide very little legal guidance. Although the opinions and views expressed are based on our best interpretations of existing law and what we believe a court would probably conclude if presented with the applicable issues, we can give no assurance that our interpretations would be followed if the issues became the subject of judicial or administrative proceedings. Realization of certain benefits described is subject to the risk that someone may challenge the treatment and that a court may sustain the challenge. Because you may bear the burden of proof required to establish a fact, the opinions expressed assume the you will undertake the effort and expense to present fully the case in support of any matter that you have asserted and an opponent might challenge. None of the advice provided here may be used to avoid tax liability, interest or penalties. If you want that level of assurance you will need employ us to perform the due diligence necessary to explore the facts and law applicable to your specific circumstances. I provide answers here to allow people to see the issue spotting, solution proposals, style of communication and analysis I may apply to factual statements.
You need to hire an experienced divorce attorney. Depending on your age, withdrawing the funds from the 401k can generate income tax penalties as well as income tax liability. Besides the tax ramnifications, there are the divorce ramnifications by doing as you proposed so you need advice to prevent from creating problems other than just tax problems. It is easy to imagine scenerio of tax penalties, income tax liability, and that you are ordered to pay spouse at least one-half of balance before you pay off debt.
Sign up to receive a 10-part series of useful information and legal advice about the divorce process.