How to Split Retirement Accounts as Part of a Divorce Settlement (IRA3)

Instructor(s): Denise Appleby, APA, CISP, CRPS, CRC, Mike Tucker, Ph.D., LL.M., J.D., CPA

CPE Credits: 2

Register here : https://www.surgentcpe.com/cpe-courses/Guide-Fundamental-Rules-Tax-Free-Roth-401k-IRA3

Overview

According to the Center for Retirement Research at Boston College, about 40 percent of marriages end in divorce. For many of these individuals, IRAs are included in their divorce settlement agreement. The spouse who receives an IRA as part of a divorce settlement agreement is responsible for paying any income tax due on the amount. To ensue that this requirement is properly applied, the applicable provisions in the Tax Code must be adhered to.

Major Topics:

• The tax implications of splitting an IRA or 401(k) under a divorce settlement
• How divorce affects the 10% early distribution penalty
• Special documentation requirements for qualified retirement plans vs IRAs
• Divorce and portability of retirement accounts
• Distribution limitations for assets awarded under a divorce settlement agreement

Learning Objectives

• Protect clients from unintended consequences when giving up retirement accounts under a divorce settlement agreement
• Identify transactions that are affected by splitting a retirement account under a divorce settlement
• Know the documentation requirements that must be provided to IRA custodians and plan trustees
• Properly split IRA assets that are awarded under a divorce settlement agreement
• Understand how divorce affects a former spouse’s IRA
• Identify tax planning opportunities for retirement assets awarded under a divorce settlement

Designed for:

Financial advisors, tax professionals, and individuals who support IRAs and employer plans (employees of financial institutions who answers questions about and handle transactions for IRAs and employer plans)

Prerequisite:

A basic understanding of individual income tax

Advanced Preparation:

None