QDRO for assets rolled to IRA

[jane123]

QDRO issud for QP. Assets were not not given to former spouse.

Assets subsequently roleld to IRA at another financial inst.

Participant wants to use QDRO to trasnfer assets from IRA to former spouse. I vaguley remember reading somewhere that you cannot use a QDRO issued for a QP for an IRA?

What do you think?

Thanks in advance.

Jane

[mbozek]

IRAs are not subject to QDRO rules because they are not qualfied plans and custodians are not plan admin. IRAs can be divided by ct order under IRC 408(d)(6) in non taxable transfer if custodians receive proper instructions from ct.

[david rigby]

I would think the PA may want to get its act together, first to determine if it made a payment in violation of a duly received (and valid) QDRO. If so, then to determine if it can be fixed.

BTW, how long ago was this transaction? Could it have been less than 60 days ago?

[jane123]

The QDRO is from 1999.

I understand that a QDRO is for QRPs. Sometimes, the judges and the lawyers do not understand and issue a QDRO for IRAs and they will submit a QDRO for IRA assets. Our policy is that since it is giving us more than we need, as long as the basic requirements are met, i.e. clearly instructing how to divide the IRA and identifying the IRA by number, we will use it.

But I remember reading somewhere that if a QDRO is issued for a QRP, and the assets are rolled to the IRA before the they were divided under the QDRO, the same document cannot be used for the IRA. I can’t seem to put my hands on the article or reference.

[mbozek]

You really should rethink what you are doing if you represent the custodian-IRA transfers under 408(d)(6) are subject to different rules than QDROs and IRS has disqualified IRA transfers to ex-spouses where the requirements of 408(d)(6) were not complied with resulting in taxation to the IRA owner. The case you cite refers to the obvious- funds cannot be transfered to the ex spouse's IRA before the ct order or divorce decree dividing the IRA has been issued.