IRA/SDIRA - How to Split up in Divorce - Taxes?

2 Replies

Hello All,

This seemed like the most logical place in the forums to ask about this. Even though it is not real estate related, it IS SDIRA related.

I am almost done with figuring out my divorce settlement and wrap things up soon. We are doing as much as we can ourselves, although I am going to run the final paperwork past my lawyer. One thing we need to figure out is our retirement assets which consist of regular IRAs, ROTH IRAs, and a SDIRA. We have agreed to split these assets '50-50' as we are in a marital property state. 

What I am wondering is 'the future value' of the different kinds of accounts. Save I have a choice of taking 100K in ROTH accounts vs 100K in a Traditional IRA. If either one would grow to say 400K in 15 years (10% aprox. return), and then the ROTH would be *worth* 400K as no taxes are due. The traditional might be *worth* say 300K if in the 25% tax bracket.

Am I missing something in thinking that the ROTH is more valuable down the road on a 'dollar to dollar basis'?

The only 'extra value' that I would see in the Traditional IRA is that it could be converted into a Solo401K for the benefit of 'leveraged investing' and avoiding some of the potential tax liabilities of leveraging my ROTH within my SDIRA.

Thanks, Dan Dietz

if it were me? I'd take the Roth for sure. If I was your soon to be ex I'd want you to shell out something for future taxes if you stuck me with the tradional IRA.

Sorry about your divorce.  I am a newly wed and was on the fence with a pre nup.  Didn't get one, but man.. I wish I had. I hope it all works out for you. 

@Daniel Dietz

you may get some ideas here on the forum, but you should seek help of a professional in your situation.

Ironically, just this week I used services of an attorney to help with my estate planning questions and one of his specialties is divorce. He seem to be pretty good and I'll be glad to pass on his info if you wish. 

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