Under the Tax Cuts and Jobs Act of 2017, charitable deductions are one of the few deductions still available. If a married couple want to make a large charitable contribution - with pre-tax money - the In-Marriage QDRO can do the trick.
It is best if your accountant runs the numbers, but it is generally a wise tax strategy to use pre-tax money from a tax-qualified vehicle like a 401(k) to make a charitable contribution. The charitable deduction can reduce the couple's tax bill and the real economic cost of making the contribution is less than if post-tax money was used.
I'm the only attorney in Nebraska who knows how to do an ...
Read More
In a few words, the In-Marriage QDRO explained
The In-Marriage QDRO a/k/a The Happily Married Couple QDRO allows one spouse to transfer ERISA money (usually in a 401(k) or 403(b)) to the other spouse. The transfer is to an IRA for the receiving spouse, but it can be to cash.
There are many economic and legal reasons to do an In-Marriage QDRO. The most popular application is transferring assets from the older spouse to the younger spouse in order to defer RMD's.
With an In-Marriage QDRO the spouses remain married, there is *no* 10% penalty and there is *no* suspension of contributions by the employer. ...
Read More
Real estate investing and the In-Marriage QDRO
Say that three married couples want to invest in real estate together. They can form an LLC or limited partnership for that purpose. As always, it is wise to have a buy-sell agreement between the parties.
Imagine further that three of the spouses have 401(k)'s that they would like to invest in this new real estate venture. With the In-Marriage QDRO, each spouse can transfer some 401(k) money to the other spouse and then invest in a self-directed IRA that would purchase the real estate.
Because no one married couple owns 50% of the LLC or limited partnership, the entity can borrow money in order to purchase the real estate. The loan, ...
Read More