IRA in Divorce settlement
I have a client that is receiving her soon to be former husband’s IRA through the divorce degree. Are there any planning considerations as to whether she consolidates this IRA with an existing IRA in which she is the owner?
Or
Is there a benefit to segregating the former husbands IRA out into a new IRA in wife’s name.
Client is age 50. Again it’s an IRA not a QDRO 401k.
Permalink Submitted by Alan - IRA critic on Wed, 2020-08-19 23:04
Rather remote reasons to not combine these IRAs is if she lives in a state that does not provide complete IRA creditor protection, and she has a fairly large rollover IRA already. Otherwise, there is no tax benefit from keeping them separate. If she is receiving any IRA basis from the transfer, she should file a Form 8606 to report that basis added to her IRA the next time an 8606 is otherwise needed for her TIRA.