Required Minimum Distributions


Those who are subject to Required Minimum Distributions should be strategizing with their attorney if they are facing divorce or modification of alimony. The CARES act contains provisions related to RMDs (required minimum distributions) which should be accounted for in any divorce or modification of alimony strategy. RMDs are included as “income” for purposes of calculating alimony (both in a divorce and a modification). Under the new CARES act, RMDs for 2020 are suspended. If the distribution has not been taken yet, it does not need to be taken. Additionally, if the distribution HAS been taken in the last 60 days, there is a 60-day rollover rule in order to negate the tax consequences. Keep in mind, the rollover option is only available to Traditional IRAs, not inherited IRAs as inherited IRAs do not have rollover provisions.

By not taking an RMD, the income will be lower thus effecting the alimony calculation. Whether this will continue to be an option in 2021 will not be known for quite some time. Contact your attorney to further discuss how the CARES act will affect your case.