Splitting an inherited IRA (divorce)

Submitted by ShipsnGiggles on Thu, 2018-11-15 13:54

Client inherited a non spousal IRA.
Client has been stretching payouts
Client now getting divorced

Is an inherited IRA marital property subject to a divorce decree? Said another way – can an inherited be “split” tax free upon divorce?

Thank you



Submitted by Alan - IRA critic on Thu, 2018-11-15 15:33

Inherited assets are considered separate property, however in the process of negotiating a divorce settlement the law in some states might agree to the inherited IRA being transferred per the divorce settlement. If the inherited IRA owner does not voluntarily agree to including the inherited IRA, I think it is much less likely if even possible for the inherited IRA to be transferred. Best to refer this question to an estate or divorce attorney in the applicable state.

Submitted by Bruce Steiner on Sun, 2018-11-18 19:13

  • Gifts and inheritances are in the pot for equitable distribution on divorce in about 1/4 of the states.  In what state do your client and his/her spouse live?  
  • IRAs may be transferred to a spouse tax-free in a divorce.
  • Bruce Steiner

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