RMDs in Divorce

What the withdrawal record shows, and what to ask before you settle. This guide pairs with our Attorney Reference PDF on RMDs in Divorce. It is written for divorce attorneys handling a case where one or both parties hold retirement accounts at or past RMD age.

What is an RMD, and when do they start?

An RMD is the minimum amount the IRS requires to be withdrawn each year from certain retirement accounts once the owner reaches the applicable starting age. The owner may take out more, but generally not less. On account statements, an RMD looks like any other distribution, which is why the first question in a divorce file is whether the withdrawal was required or elective.

IRAs (Traditional, SEP, SIMPLE)

First RMD generally due by April 1 of the year after the owner reaches the applicable starting age. Annual RMDs due by December 31 each year after that. Under current federal law, the starting age is 73 for owners who reach 73 between 2023 and 2032, and 75 for those who reach that age beginning in 2033. No still-working exception applies to IRAs.

401(k) and similar employer plans

If the participant is still actively employed by the plan sponsor, is not a 5% owner, and the plan allows it, RMDs may be deferred until retirement. The still-working exception is plan-specific and does not extend to IRAs.

Which accounts have RMDs?

• Traditional IRAs
• SEP IRAs
• SIMPLE IRAs
• 401(k) plans
• 403(b) plans
• 457(b) plans
• Profit-sharing plans
• Other defined-contribution plans
• Inherited retirement accounts

Roth IRAs are generally not subject to lifetime RMDs while the original owner is alive. For many non-spouse beneficiaries of inherited accounts, the account must generally be emptied within 10 years. A distribution from an inherited account may be required under those rules, not chosen by the recipient.

The critical question: was it income for support purposes?

Whether a retirement distribution is treated as income for support is a legal question for counsel and the court. A retirement statement showing a distribution does not answer the question by itself. The character of the distribution is information counsel needs in order to make that call. Before treating an RMD-age distribution as income, ask:

• Was the withdrawal required or voluntary?
• What type of account was it? Was it inherited?
• Was the participant still employed by the plan sponsor, making the still-working exception relevant?
• Is the same account also being divided elsewhere in this case?
• Was the distribution recurring, or a one-time event?

A missed or partial RMD is its own signal

An RMD is required, but that does not mean every account holder takes it on time. A missed or partial distribution in the years around a divorce can change how an account looks on paper, and it carries a tax consequence of its own. Under current federal law, a missed RMD is generally subject to a federal excise tax of 25% of the amount that should have been withdrawn, reduced to 10% if the shortfall is corrected within the timeframe the rules allow.

This is general information, not tax advice, and the tax treatment is a question for the client's CPA. From a records standpoint, the point is simpler: if an RMD-age account shows no distribution in a year one was due, or a distribution smaller than the calculation would suggest, that gap is worth identifying before settlement rather than after.

Division complications: accounts already in pay status

For a defined-contribution account in pay status, the QDRO has to address how distributions in flight are treated, whether the alternate payee's share is computed before or after the current year's RMD, and how the plan or custodian handles future RMD calculations after the split. For a defined-benefit pension already paying, see the post-retirement QDRO guide, which covers the shared-payment and election-locked scenarios.

Documents to request at the outset

• Full account statements
• Year transaction history (showing each distribution)
• Any RMD notice or calculation from the custodian or plan
• Prior year-end balance (used to calculate the current year's RMD)
• Beneficiary information (if the account is inherited)
• Plan or custodian procedures (if already in pay status)
• Confirmation of active employment with the plan sponsor (if the still-working exception is in play)

How TOVA fits into an RMD-age case

TOVA reviews the retirement-account records to identify whether each distribution on the statement is a required minimum distribution, an elective distribution, or an inherited-account distribution under the 10-year rule. We document what the records show. We do not characterize that information for support purposes. Counsel uses our analysis to make the legal call.

When an account is already in pay status at the time of division, we identify the custodian's or plan's procedures and draft the order to match. For TIAA, OPM, DFAS, and similar custodians with non-standard processes once distributions are underway, the order has to be drafted to the specific procedure or the plan will not accept it.

What TOVA does not do

• We do not provide tax advice. The client's CPA or tax advisor handles tax questions, including the consequences of a missed or partial RMD.
• We do not provide legal advice or characterize distributions as income for support purposes. Counsel makes those calls.
• We do not interpret IRS rule changes. We work from the rules in effect at the time of the engagement and confirm anything ambiguous with a qualified tax advisor.

What we need to start a review

• The documents listed above for each retirement account in scope.
• Date of marriage and date of separation or divorce.
• The participant's date of birth (so we can confirm whether RMD age applies).
• The settlement agreement or proposed division terms, if drafted.
• Identification of any account already in pay status and the plan or custodian holding it.

For related context, see the IRA division guide, the post-retirement QDRO guide, the TIAA 403(b) guide (for in-pay-status TIAA cases), the forensic tracing guide, and the topics index.