I have heard that "our" IRA stocks....my 50% of assets after divorce, can be transferred to my name without penalty of taxes. True? Anybody have any first hand experience/knowledge of this?ThanksBarbie
It would help if you could provide some more info (although I still would probably not know the answer, but someone else might).1) You say that "our" IRA. My guess is that the IRA is in your (ex)husband's name. Is this correct? I ask because an IRA can only be in one person's name (i.e. not joint)2) What state are you in? (This may matter)jbw.
As a general rule and at the federal level (not sure about various states) an IRA/401(k) trustee/custodian is obligated to honor a QDRO (qualified domestic relations order) issued by a court of jurisdiction. In plainer English this means that if you are getting a divorce & an agreed provision of the divorce decree is that you will get x% or $y of an IRA/401(k) account then either (1) submit a copy of the final decree to that trustee of (2) even better, have your lawyer draft a seperate QDRO which is signed by the judge & use it to present to the trustee. In this manner, whatever % or $'s you are supposed to receive will be directly transfered to the account & location of your choice retaining its character as deferred monies.
jbw, First of all the divorce is taking place in OHIO. Secondly, although I have some IRA's of my own he obviously has the much bigger ones. And since we are splitting assets 50/50 some of his IRA $$ will become mine. Neither of us wants to disturb them by simply taking the money out and paying huge tax dollars. But we were told that they could be simply transferred to another relative (spouse) in the case of divorce. Yes, we're getting legal and CPA advice. But we're trying to do this divorce without attorneys. Did I make sense? No...well, none of this makes sense anyway. After 35 yrs of marrage he wants out so I'm fumbling my way through this quagmire. Thanks for your reply.Barbie
Thanks SO much Badger. I'm trying to figure all this out and this helps so much!!!Barbie
Barbie,In order to move the money you need to open an IRA someplace. It can be at a discount broker or at a mutual fund company or where ever you want. Once the account is open you will need to provide the custodian with a copy of the QDRO. Your custodian will then contact the custodian where the money is at (whether it's in a 401(k) or an IRA). Then the current custodian will send money or shares of stock to your custodian. This is called a transfer between custodians. Once the money is in your account and it's yours. You can invest it however you wish. However, there is one thing that you can't do, and that is if the money is coming from your ex's 401(k) or other type of qualified retirement plan, you can not roll it into any qualified plan you may be a part of. But, other than that you can invest it anyway you wish in your IRA.Good Luck,RobinB
Thanks Robin......I've added this to my folder so I can keep checking back as I'm moving forward on this new path in life! Hope I can keep all of this straight! LOL
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