Devil in the DetailsDevil in the Details
Legislation, a new Uniform Principal and Income Act and reminders to plan with caution were all issues in 2018.
The year 2018 saw a minor legislative change to individual retirement accounts in divorces, a significant change in trust accounting rules that states should adopt and a variety of court cases and private letter rulings. All are reminders of the need for attention to detail.
Bipartisan Budget Act of 2018
Authority for making an income tax-free direct transfer of an IRA in a divorce was moved from Internal Revenue Code Section 72 to IRC Section 408(d). That change was needed to preserve such transfers, because provisions permitting tax-free transfers between divorcing spouses, including IRAs, were struck.1
Roth IRA conversions occurring after Dec. 1, 2017 may no longer be recharacterized.2 However, no change was made to the rule that Roth IR...
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