I have a friend that is going through a divorce and it's supposed to be finalized next month. Part of the settlement is that she has to give 50% of her 401K proceeds to her soon to be ex-husband. Now I know that early withdrawls on a 401K result in taxes being paid on the withdrawn amount as well as a 10% penalty. Does the tax code provide any relief from this in the event of a divorce? For instance, would the ex-husband be responsible for the taxes and penalty?