IRA 72t going through divorce with QDRO
how difficult would it be to get a private letter ruling saying that an IRA would be giving the spouse 1/3 of the IRA plan through a QDRO and then the 72t payments would just continue the same. What is the likelihood of this being possible and the what would the cost of that be and how long that might it take?
Permalink Submitted by Alan - IRA critic on Wed, 2014-11-26 18:51
QDROs do not apply to IRAs. The equivalent would be a transfer incident to divorce. The IRS has been inconsistent in the past regarding divorce and 72t plans. The cost of a PLR would be around 10k plus legal fees, best guess 13-14k and perhaps a year to get the ruling. Chances are that if the current 72t distribution was continued as if nothing had happened, the IRS would not bust the plan, but no guarantee. Compare a 10% penalty on all the distributions should the IRS bust the plan vrs the PLR cost with no guarantee of the result. A better option if possible would be to structure the divorce settlement to not affect the IRA or at least not until the 72t plan was completed.