QDRO Limitations

[pilotage]

Is there a statute of limitations on completing a rollover using a Qualified Domestic Relations Order from the date of divorce? I was under the assumption that if I don't complete the rollover within 60 days of divorce there will be tax implications/penalties for me.

 

[LdiJ]

Is there a statute of limitations on completing a rollover using a Qualified Domestic Relations Order from the date of divorce? I was under the assumption that if I don't complete the rollover within 60 days of divorce there will be tax implications/penalties for me.

The tax implications of a QDRO depend on what you do with the money. If you roll the money into a retirement account of your own, there are no tax implications/penalties no matter when you finalize the QDRO. The tax implications come when you withdraw the money.

The rollover however, should be a trustee to trustee rollover. The money should not pass through your hands. If for some reason the money must pass through your hands, that is when its critical to roll the money into a retirement account within 60 days of the money going into your hands. Watch something however...if taxes get withheld you have a problem, because then you do not have the entire amount available to roll over. Which is one more reason why it needs to be a trustee to trustee rollover.

However, that isn't normally what happens with a QDRO. Normally a QDRO splits the money into two separate accounts, and the you either leave the money in the account, or you roll it over into an IRA at another institution.