When Missouri couples have IRAs and decide to divorce, it is important for them to make certain that they divide their retirement accounts correctly. If people make mistakes, they may face substantial tax liabilities from the Internal Revenue Service.
When one spouse will need to give the other spouse funds from his or her IRA, it can only be done in one of two ways. The account holder can change the name on the account to the recipient’s name if all of the IRA will be transferred. The other way to give funds from the IRA to the other spouse is to transfer them directly from the IRA into an IRA that is in the spouse’s name.
People cannot simply withdraw the money from their IRA accounts and give it to their spouses. If they do this, they may have to pay taxes and penalties. People should provide their divorce decrees to the IRA custodians. They will then need to complete paperwork to authorize the direct transfers to their former spouses. The transfers can be made to an existing IRA in the spouse’s name, or he or she can establish a new one in his or her name.
When people are preparing to divorce, they might want to seek advice from experienced divorce lawyers. People who have been married for lengthy periods of time may have amassed substantial assets that might make the property division complex. Lawyers may assist their clients in dividing their property in such a way that their assets might be protected and tax liabilities may be avoided. They may advise their clients about protecting their financial interests and may negotiate with their clients’ spouses to try to secure full settlement agreements that help to avoid a protracted battle in court.