How to Transfer Ownership of an IRA

The Internal Revenue Service takes the individual nature of an individual retirement account seriously, and in most cases prohibits any transfer of ownership of the account without serious tax ramifications and penalties. In certain cases, you can change the ownership of an IRA. These are usually for a significant event, such as the death of the owner of the IRA or a divorce. The trustee is instrumental in facilitating those changes.

Spousal Inheritance

A spouse inheriting an IRA has the most options in how to treat that account. Contact the IRA trustee upon the death of the owner. You will need to provide proof of the death of the owner, such as a death certificate. You can then request that the IRA be retitled in your own name as the spousal beneficiary. This will allow you to treat the IRA account as if it is your own -- you can make contributions to the account if you are eligible, and you can delay mandatory withdrawals from a traditional IRA until you reach age 70 1/2, and based on your own life expectancy. With a Roth IRA retitled in this way, you do not have to take withdrawals at any age. Make sure that you name new IRA beneficiaries to the account.

Inheritance - Other than Spouse

As a non-spousal beneficiary, your options for transferring ownership of an IRA are more limited. The account must be retitled to reflect the name of the original owner and the beneficiary. For example, "John Doe, for the benefit of Jane Doe" is acceptable. Some experts recommend being more specific, such as "John Doe, IRA, (deceased on May 3, 2012) f/b/o Jane Doe, beneficiary." This naming protects the tax benefits of an inherited IRA. The account must remain separate from your own IRA funds, and you do not have the option to contribute to the account or take distributions based on your life expectancy.


In case of a divorce, the court may split the value of marital assets between the two spouses, including any IRAs. If the entire value of the account is being transferred to your ex-spouse, you can retitle the account in the name of the person receiving the account with a court order assigning ownership. Contact the trustee to handle this. If only part of the assets are being transferred, the funds can be transferred to the receiving spouse by giving the trustee of the IRA a copy of the court order, and the receiving IRA details such as the trustee and the account number. This type of transfer of funds is tax-free when done in connection with a divorce by court order.

Charitable Contribution

For 2013, you can transfer part of your IRA assets to a nonprofit organization and owe no taxes on the transfer. To qualify, you must be at least age 70 1/2. You can transfer up to $100,000 directly to nonprofits this way. Contact your IRA trustee to facilitate this transfer, and keep it tax-free. The IRS has extended this benefit in previous years, and may extend it into the future as well.