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In Georgia, an IRA in a divorce is treated like other liquid assets of the parties if acquired during marriage. IRA stands for Individual Retirement Account and delays paying taxes on money until it is withdrawn. Although similar to a 401 (K), it is not managed by an employer but is managed by the individual themselves.
There are different types of IRAs. IRAS can be set up by:
- Bank or other financial institution
- Life insurance company
- Mutual fund
- Stockbroker
Unlike some other retirement accounts, a Qualified Relations Order (QDRO) is not required for division and transfer. It will also not result in adverse tax consequences or penalties from the transfer like early withdrawals. However, the transfer must be completed correctly to avoid penalties and this exception only applies to the transfer from one spouse to the other.
Important considerations about the transfer are:
- The transfer should be from one spouse’s IRA to the other spouse’s IRA.
- The transfer must be provided for in the divorce decree or settlement agreement.
You can find out more about IRAs at:
https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras
And if you are looking to have legal assistance in making sure this asset is handled correctly in your divorce, then you should hire legal counsel to assist you. Our firm stands ready. Reach out to schedule an attorney meeting by calling 770-762-4628.
