Understanding the RMD Rules Post-Divorce

When a couple divorces and divides their qualified retirement plan assets via a qualified domestic relations order (QDROs), a separate account is established for the ex-spouse of a plan participant. Many divorcees mistakenly believe that the RMDs for that separate account depend entirely on the ex-spouse's age. In reality, the RMDs for the separate account continue to depend on the original plan participant's age. For example, if the separate account is maintained, the ex-spouse's RMDs must begin when their former spouse reaches their required beginning date (73 or 75, depending on the individual's date of birth). That's true regardless of the ex-spouse's age. However, the ex-spouse uses their life expectancy factor when calculating the RMD. To avoid this result, the ex-spouse can roll the funds from the QDRO separate account into an IRA in their own name. In this case, RMDs would then depend on the ex-spouse's age, not the plan participant's age (although any required distributions for the year-of-rollover must be taken before the rollover can occur). For more information on the rules governing QDROs and retirement plans, visit Tax Facts Online. Read More: Link to Q3908. Note: Q is updated.