How do I split an IRA in divorce?

When an IRA needs to be split in a divorce it’s best to use a trustee-to-trustee transfer between the spouses IRA and former-spouses IRA.  IRAs are split in accordance with the divorce decree so make sure the decree specifies the dollar amount or specific securities in the IRA that should be transferred.  Review the process with the custodian of the IRA prior to signing any distribution or transfer paperwork.  You may need some or all of the following in addition to the custodian’s transfer paperwork.

  1. A final divorce decree or separation agreement with a judge’s signature.
  2. A marital property settlement agreement.
  3. Signatures of the account holder and the spouse or ex-spouse, as appropriate.
  4. A letter of authorization signed by both parties agreeing to specific asset division.  This may also be accomplished by the custodians form.

If you do not have a financial advisor that is fluent in the tax laws around divorce please reach out to us.  We have CPAs and EAs on staff that can advise you and your attorney’s on how to draft the divorce decree so that you are protected.


You do not need a Qualified Domestic Relations Order (QDRO, pronounce “qua-dro”) to split an IRA in divorce.  In fact, using a QDRO to split an IRA will trigger a taxable event to the IRA account holder and excess contribution to the recipient.  In fact, QDROs are only used for employer plans such as 401ks and pension plans but they should also be used for small business employer plans like SEP-IRAs and SIMPLE IRAs.  Despite the indication of these plans as IRAs they are in fact employer sponsored plans.

Chesapeake Financial Advisors is a fee-only financial planning, investment advisory and tax planning firm with offices in Towson, Bel Air and Columbia, Maryland.