While many assets can be freely transferred between spouses and enjoy special exemptions from taxes, individual retirement arrangement accounts fall under specific guidelines, and many transfers are not allowed. IRA account transfers are allowed in the case of the death of the account holder. In addition, a court order in a divorce can allow the transfer of IRA assets to an ex-spouse. A simple withdrawal from your account and transfer into a spouse's account may incur taxes and penalties.
Each spouse is entitled to open their own IRA account, and to fund the account up to the maximum allowable contributions for the year. As of 2013, you can contribute up to $5,500 to an IRA account, or $6,500 if you are age 50 or older. Deductible contributions or Roth contributions may be restricted as your income increases. If you made a full contribution to your IRA account, your spouse has not, and you find at the end of the year that your contribution will be restricted because of a higher-than-expected income, you can withdraw the excess contribution before you file your taxes for the year, and make a contribution to your spouse's account up to the limit.
Upon Death -- Beneficiary
You can transfer IRA assets to your spouse upon your death by naming your spouse as a beneficiary to your IRA account. Your spouse as a beneficiary enjoys benefits that other beneficiaries cannot take advantage of. Your spouse is allowed to re-title the IRA account in his own name, and can even contribute to the account in the future. With this spousal transfer, the IRS treats the account as your own, and minimum withdrawals will not be required until you reach age 70 1/2.
Upon Death -- No Beneficiary
If you do not name a beneficiary for your IRA account, the value of the account will be transferred to your heirs through your will and the probate process. If you do not have a will, the court will determine who receives your assets. Your spouse will then receive either all or a portion of the value of your IRA assets, depending on your will or the court decision. The IRA account will be liquidated, and the tax benefits of the IRA account will be gone.
If you divorce, your IRA accounts may be divided up between you and your spouse, as dictated by any divorce agreement. In this case, your accounts can be transferred to your ex-spouse through the court order, by either changing the name on the account or by transferring the assets from your account to your spouse's account. This transfer will not have any tax ramifications or penalties if completed according to a court order.