macuser_22, that simply determines what benefits are permissible under a QDRO. It has nothing to do with the fact that any distribution made to an alternate payee under a QDRO (which can only be a benefit that is permissible under a QDRO, otherwise it's not a QDRO), is exempt from any early-distribution penalty.
Where it states, "Once Stephanie has taken her withdrawal, which is allowed only once, she rolls her 401(k) to an IRA," the reference cited by mmclean is either simply wrong or it's failing to convey that this particular QDRO agreement only permits the distribution to the alternate payee to be a lump-sum distribution and not a partial distribution. If the plan only permits a lump-sum distribution but Stephanie wants to continue to defer everything other than what is immediately needed, Stephanie can roll over to an IRA whatever isn't needed. After a lump sum distribution, nothing will remain in the 401(k) to be paid to Stephanie as an alternate payee under the QDRO.
(That reference also demonstrates ineptness in drafting the separation agreement by making the assumption that $750,000 of equity in a home is equivalent to $750,000 in a 401(k), but I guess that's not the focus of the reference. Still, it goes to show that the example in the reference was rather poorly thought out.)
