Can an IRA Be Gifted or Transferred to Another Person?

An IRA cannot be transferred to another person during your lifetime, with one narrow exception for divorce. Federal tax law treats every IRA as belonging to one individual, so you cannot retitle it, gift it, or add a co-owner without the IRS treating the whole balance as a taxable withdrawal to you. The account can change hands in two situations: a court-ordered division between spouses, and the transfer to a named beneficiary after the owner’s death.

Why Lifetime Transfers Are Blocked

Federal law requires every IRA to be set up and maintained for the exclusive benefit of one person. Joint IRAs do not exist. If both spouses want retirement accounts, each opens a separate one.¹ That single-owner structure is why the account cannot be moved into someone else’s name at any point while you are alive.

If you try, the IRS treats the entire balance as distributed to you in that tax year. You would owe ordinary income tax on the full amount at rates that run up to 37% for 2026.² Add the 10% early withdrawal penalty if you are under 59½, and close to half the account’s value can disappear before the other person receives anything.³

The consequences are worse for indirect workarounds. Directing your IRA to lend money to a relative or invest in a family member’s business is a prohibited transaction. The account loses its tax-sheltered status as of the first day of that tax year, and the full balance is treated as distributed to you.⁴ There is no undo.

Transferring an IRA in a Divorce

Divorce is the only situation where IRA money can move from one living person to another without triggering taxes. Under IRC Section 408(d)(6), transferring all or part of your IRA to a spouse or former spouse is not a taxable event when it is done under a divorce decree, legal separation agreement, or a written instrument related to one of those.⁵ Once the transfer completes, the receiving spouse owns the account outright and the IRA keeps its tax-deferred status.⁶

A common and expensive mistake: assuming a Qualified Domestic Relations Order governs the IRA. QDROs apply to employer-sponsored plans like 401(k)s and pensions, not to IRAs. For an IRA, the transfer must be authorized by the divorce decree or separation instrument and carried out either as a name change on the existing account or a direct trustee-to-trustee transfer into a new IRA in the receiving spouse’s name.³

The IRS is strict about the method. An indirect rollover, where one spouse takes a check and then deposits the money into the other spouse’s IRA, does not qualify for tax-free treatment even if completed inside the 60-day window.³ The funds must move directly between custodians, or the account must simply be retitled. Getting this wrong means the transferring spouse owes income tax on the full amount, plus the early withdrawal penalty if under 59½.

Moving IRA Money to a Charity

A charity is the one non-spouse recipient you can send IRA money to during your lifetime without a tax bill. Qualified charitable distributions become available at age 70½, even before required minimum distributions start.⁵ For 2026, you can send up to $111,000 from a traditional IRA to eligible charities and exclude it from your taxable income entirely. A separate one-time election allows up to $55,000 to a split-interest entity such as a charitable remainder trust.⁷

The distribution has to go directly from the IRA custodian to the charity. If the check passes through your hands, the exclusion is lost. QCDs can also count toward your required minimum distribution for the year.

What Happens to an IRA After the Owner Dies

When an IRA owner dies, the account passes to whoever is listed on the beneficiary designation form filed with the custodian. This form overrides a will, a trust, and virtually every other estate planning document. If the form names one person and the will names another, the custodian follows the form. Keeping the designation current is one of the most important and most overlooked financial tasks.

What the beneficiary can do next depends on their relationship to the deceased.

Options for a Surviving Spouse

A surviving spouse has the widest set of choices. The main ones are rolling the inherited funds into their own IRA, keeping the account as an inherited IRA, or taking distributions based on their own life expectancy.⁸ Rolling it into your own account usually works best for a younger surviving spouse because it resets the required minimum distribution clock to your timeline instead of the deceased owner’s.

Treating the IRA as your own also lets you name new beneficiaries and continue contributing if you have eligible compensation. The tradeoff: withdrawals before 59½ face the 10% early withdrawal penalty, same as any other IRA. A surviving spouse who needs the money sooner may do better keeping it as an inherited IRA, where the penalty does not apply regardless of age.

Non-Spouse Beneficiaries and the 10-Year Rule

Non-spouse beneficiaries, including adult children, siblings, and friends, cannot roll inherited IRA assets into their own IRAs. They open a separate inherited IRA, and for deaths in 2020 or later, they generally must empty it by the end of the tenth year after the year the original owner died.⁸

The 10-year rule does not always mean you can wait until year ten and take a single lump sum. If the original owner had already begun taking required minimum distributions before death (which happens at age 73 under current law), the beneficiary must take annual distributions in years one through nine and then empty the account by the end of year ten.⁹ Missing an annual distribution triggers a 25% excise tax on the shortfall, dropping to 10% if you correct it within two years.¹⁰

If the owner died before their required beginning date, the beneficiary has more flexibility within the ten-year window, but the account still has to be fully drained by the end of year ten.

Beneficiaries Who Can Skip the 10-Year Rule

Some non-spouse beneficiaries qualify as eligible designated beneficiaries and can stretch distributions across their own life expectancy instead. The IRS recognizes five categories:

Surviving spouse, with the broader set of options described above.
Minor child of the account owner, who uses life expectancy distributions until reaching the age of majority; the 10-year clock then starts.
Disabled individual, as defined by the tax code.
Chronically ill individual, a related but distinct category.
Any person not more than 10 years younger than the deceased owner, such as a sibling close in age.

Falling into one of these categories lets you take annual distributions based on life expectancy rather than emptying the account within a decade.⁸ The difference can amount to tens of thousands of dollars in tax savings over the life of the account.

The Owner’s Final Required Distribution

IRA owners must begin taking required minimum distributions at age 73, a threshold that rises to 75 starting in 2033.¹¹ If the owner dies partway through the year without having taken that year’s full RMD, the beneficiary has to complete it. The obligation transfers immediately, often before the beneficiary has finished the paperwork to claim the account. Missing it triggers the same 25% excise tax as any other missed RMD.¹⁰

What the Custodian Will Ask For

Custodians will not move a dollar until the paperwork is complete, and the required documents differ by scenario.

For a divorce-related transfer, you need a court-certified copy of the divorce decree or the written separation agreement authorizing the IRA division. The transfer request has to state clearly that this is a transfer incident to divorce, so the custodian does not withhold taxes or report it as a taxable distribution. Both spouses provide Social Security numbers and account information.⁶

For an inherited IRA, the beneficiary provides a certified copy of the death certificate, personal identification and Social Security number, and in most cases a completed beneficiary claim form. The custodian verifies the beneficiary designation on file, confirms the death, then retitles the account or opens a new inherited IRA. Processing typically takes one to two weeks once documents are submitted, longer when estates or multiple beneficiaries are involved.

Some custodians require a medallion signature guarantee rather than a notary stamp when transferring securities held in certificate form. Banks, credit unions, and broker-dealers that participate in a recognized medallion program provide it, and many institutions offer it free to existing account holders.¹²

1
Internal Revenue Service. Publication 590-A (2025), Contributions to Individual Retirement Arrangements (IRAs)
2
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
3
Internal Revenue Service. Retirement Plans FAQs Regarding IRAs
4
Office of the Law Revision Counsel. 26 U.S. Code 408 – Individual Retirement Accounts
5
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
6
Internal Revenue Service. Publication 504 (2025), Divorced or Separated Individuals
7
Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living
8
Internal Revenue Service. Retirement Topics – Beneficiary
9
Internal Revenue Service. Notice 2024-35, Certain Required Minimum Distributions for 2024
10
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
11
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
12
Investor.gov. Medallion Signature Guarantees – Preventing the Unauthorized Transfer of Securities