Inherited IRAs give divorce judges new ground to cove
Marriage is often a complicated arrangement. Although the basis of marriage should be love, many practical considerations enter into a legal contract. Nothing proves the complexity of marriage more than the difficulties that many people encounter when they are trying to get out of one.
Several new laws entered the U.S. books with the beginning of 2019. For example, alimony payments are now counted as income for the opposite parties as before, which is visiting consequences on millions of dollars’ worth of tax returns. Some incidents are not yet described in the relevant laws, so courts and their officers sometimes have to go it alone.
Individual retirement accounts (IRAs) are involved in divorce proceedings more often than ever before. Some IRAs represent financial security to both spouses and the prospect of losing their value to a divorcing spouse is unmanageable. When it comes to IRAs that one spouse inherits from a benefactor, there is no legal guidance.
Many courts have taken this issue on out of necessity. Some courts have allowed the division of assets within an inherited IRA, while custodians are accepting it, perhaps for fear of disobeying a court order. The status of these accounts remains the same, with the ex-spouse added as a beneficiary. This process may also compensate a spouse for the loss of half of another property, which often occurs in divorce.
Divorcing spouses concerned for their property and assets may consult an attorney on the specifics of divisions during the process. Legal representation may be helpful to spouses looking to build their individual lives.