When a married couple in Pennsylvania decides to divorce, they must address numerous financial issues. For instance, if a couple has children, a child custody arrangement and parenting plan will clearly be a central focus of negotiations. Spouses must also navigate property division concerns, which can be tricky, especially if a dispute arises. If one spouse inherited IRA, there may be questions about whether that must be shared with the other spouse in divorce proceedings.
Pennsylvania is an equitable division state when it comes to property division in divorce proceedings. This means that marital assets are to be divided fairly but not necessarily equally, depending on the circumstances. To ensure that a fair result is achieved, it is helpful to become familiar with applicable state and federal laws.
Inherited IRAs and divorce
When property division proceedings occur in a divorce, all marital assets become subject to division. With some notable exceptions, this means all assets acquired during the marriage. In some cases, however, an individual spouse may retain separate ownership of a specific asset. Inheritance often falls under this category. If a spouse inherited an IRA, it is not considered marital property unless the spouse who inherited it commingles the asset with marital assets.
Commingling occurs when an asset belonging to one spouse is shared with the other spouse, typically by transferring all or part of the asset to a joint account. In a Pennsylvania divorce, commingling an asset in that manner would likely result in the commingled part of the asset being considered marital property. Those confronting property division issues usually rely on an experienced family law attorney, who can make recommendations to ensure that a client’s financial interests are protected at every stage of the proceedings.