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My wife just asked for a divorce, what happens to the 500k+ in the account?

This is for reference only and not meant as any form of action or recommendation.They are only my thoughts as I am no lawyer maybe this will help as you research the situation.... that said..... assuming it is a tax deferred account. The answer is it depends on the account but probably yes . How it is done depends on a lot of things are retired, working etc and etc. Your provides the best council given the account. Do nothing with the funds without the advise of your lawyer. Even if you work things out you need a lawyer now. That is my best recommendation.

I am sorry this is happening to you and I know it is traumatic .

No couple ever starts out to have this happen and I may not be appropriate but I hope you can work it out. I don't know your circumstance and am not a counselor but a lot of people have found that this decision made in haste is a bad one after the divorce is settled. So if you still love your wife I would encourage you to make an extra effort to reconcile before it is to late.

The answer in my opinion is yes ,,,,,,read IRC 408 (d) (6) as it will pursuant to that statue.... then go to Fidelity as they have specific wording they require.in the decree for the IRS and Fidelity. It must be written directly into the divorce decree following IRC 408 (d) (6) and as Fidelity specifies. Do nothing with the funds before the divorce and consult with your lawyer. and make sure it is written properly in the decree..

Again assuming a tax deferred account, it can be handled as a not tax event but it is critical that it must be included in the divorce decree exactly under the statue the IRS requires and Fidelity has a very specific way of handling this..... so you need to deal directly with a Fidelity rep and get the wording their legal department requires in the decree and of course talk with your lawyer. Fidelity will divide the account by the way you and your wife agree to as to the decision of you total assets and it based on how the settlement is worked out and specified it doe not have to be 50/50. The key is the proper statue and Fidelity input and a lawyer in this area if you can find one.

Dividing an IRA/401k can be simple or extremely complicated depending on your status (working/retired) and the IRA status and the funds in the account.A lot of lawyers do not know how to deal with this exactly and lots of CPA's don't deal with some of the unusual things in the history of the account.Hopefully you IRA is simple to deal with. There are specialization lawyers who deal with this and the complications of a splitting of the account and other activities around the 401K .If you live in a large metro area there will be several....maybe 4-5 and they not cheap and in addition to your divorce lawyer but necessary and your lawyer should know of any. Since this specialized they not easily found in smaller communities.

Good luck with everything. and get a lawyer for advice..... I hope you resolve this without a divorce.

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