In–Marriage QDRO®

There is now a way to transfer funds from your retirement account to an IRA owned by a spouse for cash immediately that follows federal guidelines and avoids penalties.

Applications of an In–Marriage QDRO® include:

  • Delay required minimum distributions (RMDs)
  • Create a Roth IRA
  • Fund a Self-Directed IRA
  • Buy Investment Property
  • Buy Alternative Investments
  • Pay College Expenses
  • Liquidate 401(k) Funds at Lower Tax Rates and without Penalty
  • Access Cash during Tax Years with Large Write-Offs
  • Earlier Access to Cash
  • Emergent Need for Cash
  • Avoid normal In-Service Distribution Rules
  • Provide for a spouse in a Prenuptial Agreement regime
  • Marital Issues, but no Divorce
  • Medicaid Planning
  • Buy Time from State Employment to Retire Early
  • Create a Guaranteed Pension
  • Transfer Funds away from Underfunded Pension
  • Set up a Special Needs Trust
  • Fund a Special Needs Trust by IRA Beneficiary Designation

What are the benefits of an In-Marriage QDRO®?

  • Relationship Planning
  • Growth Planning
  • Tax Planning
  • Married, but filing separately
  • Offset business tax losses
Growth Planning with In-Marriage QDRO
Tax Planning Chart with and without In-Marraige QDRO

Why not just take an In Service Distribution?

A retirement plan rollover to an IRA made while the plan participant continues to work for the employer.

  • No requirement for a retirement plan to allow for an in-service distribution
  • Age restrictions and penalties need to be considered. Over 59 1/2 – no penalty; Under 59 1/2 – penalty
  • Effect of an in-service distribution upon ability to contribute or receive employer matching contribution must also be considered.
In-Service distribution chart

What does this all mean?

401(k) plans, Pension Plans, Profit Sharing Plans, State Municipal Plans, State deferred compensation plans CAN be TRANSFERRED between Married Spouses!