Can More Than One Person Be Named on an IRA Account?

Even if you fund an IRA for your spouse, your partner will be its legal owner.

Even if you fund an IRA for your spouse, your partner will be its legal owner.

Whether you are approaching retirement age or plan to remain in the workforce for years to come, you can start saving for your retirement by opening an individual retirement account. Introduced in the early 1970s, traditional IRAs allow you to deposit pre-tax dollars into your account. Roth IRAs date to the late 1980s and enable you to contribute post-tax dollars. Regardless of which kind of IRA you open, only you can own the account.

Beneficiaries

While no one can co-own your IRA with you, you have the option of naming people and entities such as charities and trusts as your account’s beneficiaries. You will retain the option of changing your account’s beneficiaries and the percentage of the funds in your IRA that you want each beneficiary to receive after you pass away at your discretion. If you are married and choose to name someone other than your spouse as a beneficiary or partial beneficiary, you will need to submit a signed, notarized letter from your spouse that acknowledges your decision. If you don’t designate beneficiaries for your IRA, your account will be exposed to probate and the claims of your creditors when you die.

Spousal IRA

While you can’t share ownership of your IRA with your spouse, you can fund your partner’s IRA if your spouse does not work or makes less money than you. Even if you are the sole contributor to your partner’s spousal IRA, and regardless of whether your marriage ends in divorce, your spouse will retain exclusive ownership of the account and the money in it.

IRA for Your Child

Even though you can’t own an IRA with your minor child, he can establish an IRA for himself regardless of his age. The only requirement your child would have to satisfy to set up his account is to have earned income during the year. He may have to keep manual records documenting when he performed certain tasks, for whom he did them, and how much he received in exchange for his labor to prove that he actually earned income.

Protection from Creditors

Unfortunately, if you are experiencing difficulty with creditors, the federal government will still not allow you to add another owner to your IRA to protect the funds in your account. The good news is that most states shelter at least part of your IRA assets from creditors, and if you have to file for bankruptcy, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, protects up to $1 million of your IRA assets, a number that adjusts for inflation every three years. If you have multiple IRA accounts, this limit applies to the combined total of the money in all of your IRAs.

 

About the Author

Deborah Barlowe began writing professionally in 2010. With experience in earning securities and insurance licenses and having owned a successful business, her articles have focused predominantly on finance and entrepreneurship. Barlowe holds a bachelor’s degree in hotel administration from Cornell University.

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