By Your Side Throughout Your Case

IRAs and property division

| Jul 24, 2018 | Firm News, Property Division |

Divorces can be messy affairs for many couples in Massachusetts and other states across the country. Many couples find it difficult to discuss property division. There are some things, like homes and bank accounts, which are relatively easy to divide because so many couples have had to split them in the past. However, there are several couples across the country who are questioning whether or not they can divide an inherited IRA, and some are already doing it.

Usually, when a couple divorces, the property that is divided is property gained during the marriage. Separate property, which is individually owned before the marriage, can become marital property. People can have their spouse’s name put onto an account, or a spouse can contribute money to an account during the marriage. However, an inherited IRA cannot be owned by multiple people.

There are currently no tax codes or other regulations in place regarding IRA accounts. Even without the lack of regulations, many courts have allowed IRAs to be divided between divorcing couples. Most of these couples must rely on state laws, which may vary greatly from state to state. Even when the IRA is determined to be separate property, some might still choose to use the funds to satisfy other property splits.

Property division can be difficult for many couples to discuss. However, with the help of an attorney, couples in Massachusetts who are seeking a divorce may be able to communicate more effectively. With clear and effective communication between both parties, a mutually beneficial property division arrangement may be reached.