When saving for retirement, most married couples plan on combining their income as they age. However, 40 to 50% of Americans divorce over the course of their lives, so this doesn’t always go to plan. Protecting one’s interests when it comes to retirement is an important piece of asset division for many West Virginia divorcees. Here are some helpful things to know when it comes to Individual Retirement Accounts(IRAs) and divorce.
Generally speaking, a couple’s assets are usually split in some way when they divorce. This split could be 50/50, or it could be a skewed percentage for the sake of equity. However a couple decides to divide their assets, IRAs can be one of the more challenging to divide. This is due in part to the tax implications that could exist if the transfer is not made under particular circumstances. Delays can also be a challenge, especially for couples who are already retired.
Under federal law, IRA funds can be transferred tax-free if it is clearly written in the divorce decree and the money is being transferred between former spouses’ IRAs. So, transferring funds outside of an IRA, to an IRA under a different person’s name, or without an official decree could all set people up for a tax burden.
As with anything in a divorce, having clear documentation and experienced, professional advice can help prevent missteps. Dealing with IRAs is one particular situation where awareness of both state and federal laws is critical to keep things as smooth as possible. A Georgia family lawyer is an important person to have on hand when working through these details.