Are You Taking Advantage Of What A Qualified Domestic Relations Order (QDRO) Can Do For Your Retiring Client?

QDRO for a retiring client?  Yes, QDROs are often missed as an opportunity in estate planning.  It is true that QDROs are usually used in a divorce decree to transfer employee retirement income security accounts (ERISA ) from the participating spouse to the other without having to pay taxes on the transfer.  How could a QDRO be used in estate planning today?

1. Delay or advance the implementation of Required Minimum Distributions (RMDs)
2. Allow the transferring of ERISA accounts to aid in planning for long-term care cases including VA pension planning
3. Transfer of ERISA accounts without a 10% early withdrawal penalty  for emergency funding

For Example:  Mike does not want to have to take out the RMDs on his IRA, but he just turned 70.  His wife, Joan, is only 60.  Mike’s lawyer could file an In Marriage QDRO transferring the plan to Joan so that Mike does not have to take out any RMDs.