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divorce

If the IRS Ask Questions, Can Your Actions Be Justified?

A couple of years ago I was asked what the tax consequences are when a Roth IRA is split in divorce. After a pause, I answered honestly: “I have no idea…but will find out.” In fact, there is no specific guidance in the Tax Code or in the regulations on how to handle such a transaction.

How Do Revocation-on-Divorce Laws Work with ERISA Plans?

By Ian Berger, JD
IRA Analyst
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What if you have an IRA with your spouse as primary beneficiary, get divorced without changing your beneficiary and then die? Who inherits your IRA benefits.

If you live in one of the 26 states (as of June 2018) that have “revocation-on-divorce” (ROD) laws, your ex-spouse would automatically be removed as beneficiary upon divorce. Instead, your IRA would go your contingent beneficiary or, if none, to the default beneficiary under your IRA agreement.

Transferring a Roth IRA After Divorce – 3 Logical Considerations

Surprisingly, the rules governing what happens when an ex-spouse acquires a Roth IRA after divorce are unclear. There are no specific directions in the Tax Code or in the regulations. However, there is definitive guidance for a spouse who inherits a Roth IRA due to death. It makes sense to look to these rules after death for direction on how to process a Roth IRA transfer after a divorce. Of course, with no definitive route, this is only speculation until the IRS provides a roadmap.

Revocation-on-Divorce – It Matters Where You Live

Twenty-six states have adopted revocation-on-divorce statutes similar to each other, and these statutes are impacting court decisions.

Liability for Tax Underpayments, Penalties, and Interest: Relief for the “Innocent” Spouse

In many households, married couples divvy up the responsibilities; one will handle the bills and banking while the other cooks and does the grocery shopping, or one will do the laundry while the other manages the yardwork and house. This split often extends to annual income tax responsibilities, even in couples who use a professional preparer. However, when couples submit joint returns, both are jointly and severally liable for the information included in the return. That means if there’s an underpayment, both spouses are going to be liable for the debt.

Divorce, IRAs, and a Twist

Many times when individuals divorce the IRA is split between the spouses. This is done through the divorce decree or separation agreement. An IRA is never split using a qualified domestic relations order (QDRO). That is only used for splitting employer plans, such as 401(k)s.

Does a Five-Year Holding Period Apply to Each Roth Conversion?

This week's Slott Report Mailbag, coming to you live from our 2-Day IRA Workshop in Philadelphia, contains questions from consumers screaming (sometimes literally) for help! In several cases, the issues involve the magic age of 59 1/2 and cover a variety of topics, including life insurance issues, 72(t) payments with a divorce and the Roth IRA 5-year rules.

Do You Know Who Will Inherit Your IRA?

You have contributed to your IRA for years. You have made wise and thoughtful investments. Maybe you have rolled over funds to your IRA from your company plan. You may now have a significant balance. So far, you have taken smart steps toward a secure future. Don’t stop your careful planning there. It is time to ask yourself an important question, “Who will inherit my IRA?”

The 10-Year Married Mark Provides These Social Security Benefits

Divorce is often an expensive endeavor, but sometimes there are steps you can take to minimize that pain. Take Ben Affleck and Jennifer Garner, for instance. This couple just hit the 10-year marriage mark, which brings these new retirement implications into play.

Homer and Marge Simpson - Divorced? What Happens to Homer's 401(k)?

This rumor of Marge and Homer Simpson's divorce made the rounds late last week. It was quickly countered. They are supposedly separating for only one episode. But how would a separation or a divorce affect Homer’s retirement assets?

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