Category - Family Finances

1
Disability Insurance: Why You Probably Need It
2
7 Mistakes With Stretch IRA’s
3
Dealing With Your 401k During Divorce
4
Splitting Up an IRA After a Divorce
5
5 Money Pitfalls to Watch Out For In Divorce

Disability Insurance: Why You Probably Need It

The Life and Health Insurance Foundation for Education makes this declaration annually, but the average person could miss it (start planning ahead for Life Insurance Awareness Month, which comes in September).  Kidding aside, the occasion prompted me to realize that I haven’t ever written about disability insurance, which most people understand only vaguely.

Life insurance is something you probably don’t need if you’re single and have no dependents. But if you become unable to work, you still need money to live whether you have dependents or not.  One way to provide for that need is insurance.

If you’re under 60, …

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7 Mistakes With Stretch IRA’s

The stretch IRA, when implemented properly, can be one of the great vehicles for transferring wealth to your heirs, maintaining the tax-deferred status until much later.  The problem is that there are some very specific terms that must be met in order to achieve the stretch – and if you screw it up, there’s definitely not a do over in most of these cases.

Ground Rules

First, let’s run through the specifics that make up a stretch IRA situation.  When an IRA account owner dies, the beneficiary(s) are eligible to re-title the account(s) as inherited IRAs in the name of …

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Dealing With Your 401k During Divorce

An exception to the 10% penalty on distributions from a qualified plan (but not an IRA) is when the distribution is pursuant to the imposition of a Qualified Domestic Relations Order, or QDRO (cue-DRO).

A QDRO is often put into place as part of a divorce settlement, especially when one spouse has a considerably larger retirement plan balance than the other.  What happens in this case is that the court determines what amount (usually a percentage, although it could be a specific dollar amount) of retirement plan’s balance is to be presented to the non-owning spouse.  Once that amount is …

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Splitting Up an IRA After a Divorce

How does a QDRO (Qualified Domestic Relation Orders) impacts an established Series of Substantially Equal Periodic Payments (SOSEPP) – which, as we know, once established can only be changed one time?

Although not definitive, below are summaries of three Private Letter Rulings (PLRs) that seem to suggest first of all that making the distribution is not subject to the 10% penalty when a QDRO or divorce decree is involved, pursuant to the regulation in Code section 72(t)(4)(A)(ii)..

1) The transfer to a taxpayer’s spouse pursuant to a divorce decree of 50% of each of three separate IRAs owned by …

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5 Money Pitfalls to Watch Out For In Divorce

If you are going through a divorce you will experience many different emotions; fear, anger, resentment and distrust are just a few. All of these emotions can wreck havoc on your finances. You will be making major financial decisions while your emotions are influencing your choices. The decisions you make during a divorce will impact you for decades, so here are five common mistakes to watch out for during a divorce.

1. Choose your attorney with caution

If you can end the relationship without a legal fight, you will begin your new life with far more money. Legal battles are …

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