Can an IRA Be Transferred From Spouse to Spouse?

Even couples aren't usually allowed to transfer money between their separate IRAs.
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Getting hitched means merging your life and your spouse's life into one. What's yours is your spouse's and what's your spouse's is yours -- well, mostly. Except in exceptional circumstances, you're not allowed to transfer your IRA to anyone else, including your spouse. But, you might be able to help your spouse contribute to an IRA with your excess compensation.


If you name your spouse as your beneficiary and then die, your spouse can elect to treat the inherited IRA as if it were his own IRA. That means he can make contributions to it or transfer the assets to an IRA in his name. But, if you're just looking for a way to move the money from one account to the other, you can't just name your spouse as a beneficiary and then move the money, because the money doesn't transfer while you're still alive.


According to the Smart Money website, the retirement assets are often the largest asset in a divorce, so it's typical that there's some disagreement on how the money gets split up. The IRS makes an exception to the usual transfer rules, and it allows transfers made as part of a divorce decree. Any other attempt to transfer the money, including a transfer before the divorce is finalized, isn't permitted. Consulting an attorney is recommended because if you don't follow the rules just right, you could be on the hook for both the taxes and early withdrawal penalties while your ex walks off with the money.

Attempted Rollover Results

If you try to roll over money from your IRA to your spouse's IRA without death or divorce intervening, you're going to face some nasty tax consequences. First, the distribution from your IRA counts as a permanent withdrawal, which means you'll owe taxes and the 10 percent early withdrawal penalty if you're under 59 1/2 years old. Then, when your spouse deposits the money, it counts toward the annual contribution limit. If it pushes your spouse over the limit -- which is only $5,500 as of 2013 -- the IRS slaps a 6 percent penalty on the excess every year it's not fixed.

Sharing Compensation

Though you're not allowed to transfer money from your IRA to your spouse's IRA, you might be able to help your spouse contribute to an IRA in his own name. Usually, each person needs compensation to contribute to an IRA. If you don't have it, you can't use someone else's. But, if you're filing a joint return, the IRS doesn't care which spouse earned the compensation. So, say you worked during the year but your spouse didn't. He can use your compensation to fund his own IRA.

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