Any std settlement agreement text to ensure timely no-tax transfer of IRA, not months after divorce?Spouse will hold it hostage!

Asked 3 months ago - Bethesda, MD

Many bad faith acts throughout extended settlement agreement negotiation means I have strong reason to distrust spouse to implement the agreed-upon equalization of IRA via a transfer to me.
Don't want to go to court post divorce.

1) Is there a way Schwab-held IRA funds can be transferred untaxed spouse-spouse after divorce agreement is signed BUT BEFORE decree of divorce? Title to foreign home will go to spouse, preferably prior to official divorce to avoid taxes there. OK w/ me but procedure could take many many months, so spouse may try to delay final court date, holding up IRA transfer. Any way around this?

2) Is there pro forma language included in agreements to tighten up the implementation of such transfers, a standard & specific period of time within which this is completed?

Attorney answers (3)

  1. Jeffrey B Henry

    Contributor Level 16

    5

    Lawyers agree

    1

    Answered . There is a way to do this transfer without using a QDRO, which is the thing that makes it take months. Its known as a "transfer incident to divorce." The IRAs own rules and language will decide if taxes are taken, but in my experience all IRAs will consider this a transfer or rollover and the recipient (you) with have to pay tax on it but he will not and there will be no withdrawal penalty. This saves a good bit of money, but it assumes you do the transfer language correctly. And frankly, you should have an attorney for all of this to make sure it all goes right

  2. Gerard F Miles

    Contributor Level 10

    2

    Lawyers agree

    Answered . I agree with Jeff, and suggest you have an attorney assist you with this.

    This is NOT legal advice, is GENERAL INFORMATION ONLY, and does NOT establish an Attorney/Client Relationship with... more
  3. David Raymond Mahood

    Pro

    Contributor Level 18

    2

    Lawyers agree

    Answered . Your questions are very specifically related to your case. Any left out facts could change an answer/explanation. Although I agree with counsel's comments, my caveat to you is that this likely involves a large amount of money, and so you do well to make sure an attorney and a tax professional counsel you prior to making any decisions in this case. Legal advice is not given out here on AVVO because we do not get all the facts, nor do we get to review the relevant legal documents. So the way to obtain legal advice is through a consultation.

    This is NOT legal advice, is GENERAL INFORMATION ONLY, and does NOT establish an Attorney/Client Relationship with... more

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