In almost all marriages, couples merge and combine their property, and make purchases of additional assets that they share. In some situations, this includes savings and retirement accounts, such as IRAs. When a divorce occurs, it can be very difficult to figure out how to split these assets.
Individual retirement accounts (IRAs) are an excellent way to save for retirement. Many couples leverage them as a shared savings account, which means that when they get divorced, they must take proactive steps to divide the assets saved in these accounts. This requires a thorough understanding of both divorce and tax law.
Typically, divorcing couples choose to split their IRA accounts equally. This requires a transfer from their accounts, which often comes with penalties or tax obligations. A skilled attorney can help you learn more about how to make divorce-related transfers that the IRS will allow tax free.
To make a transfer, the couple must first obtain a court order that indicates both parties grant their consent for the account to be divided. The agreement should also explicitly state how the transfer is to be conducted. It is important for this agreement to be comprehensive and detailed to help avoid any points of conflict once this division occurs.
The most efficient way to split an IRA account is to create a second account, taking half of the assets in the first and transferring them to the second. Each member of the couple would be listed as the account holder on each of their respective accounts. Once this transaction is complete, each spouse would have control of half of the funds.
For more information and guidance on dividing assets and property related to your divorce, meet with the knowledgeable family law attorneys at the Law Office of K. Dean Kantaras in Florida.