72t and Divorce

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L1: 72t and DivorceHello. I have a client that started Substantially equal payments last July and is now getting divorced. Assuminghis spousegets half of the IRA account…….
1. Does he still have to take out the full amount of distribution?
2. If he doesn’t have to take the full amount would he have to take half?
3. Can he recalculate the SEP on the amount he has left?
Basically, what is my client required to do to avoid penalty and what are his options? I appreciate your help and time.
Thanks
2005-03-31 16:13, By: Tony, IP: [209.74.135.130]

L2: 72t and DivorceHello Tony:
I beleive your client has three choices:
1. Irrespective of the division of the IRA; your client may continue distributing in the same amount as pre-divorce.
2. Assuming the corpus of the IRAs is split say: 60/40; your client may post-divorce commence distributing 60% of the previous amont.
3. At any time your client could make the one-time switch to the RMD method; however I would think this election would best be saved for after the divorce and division of the assets occurs.
TheBadger
wjstecker@wispertel.net
2005-03-31 20:26, By: TheBadger, IP: [66.250.23.21]