Can You Transfer a Roth IRA to Another Person: Divorce and Death

You cannot transfer a Roth IRA to another person during your lifetime, with two narrow exceptions: a court-ordered transfer to a spouse or former spouse as part of a divorce, and a transfer to named beneficiaries after you die. Every other route involves withdrawing the money as a distribution to you, which strips away the account’s tax benefits before the cash ever reaches the other person.

Why the Account Is Locked to One Person

The Internal Revenue Code defines a Roth IRA as an “individual retirement plan,” and the word “individual” carries real legal weight.¹ There is no joint ownership between spouses. No mechanism exists to re-title the account to a child or a sibling. The contribution history, the tax-free growth, and the qualified distribution rules attach permanently to the person who opened the account.

You can withdraw money from your Roth IRA and hand the cash to someone else, but that is a distribution followed by a gift. The account itself does not move, and the recipient does not inherit any tax benefits. They just get cash. If you want another person to have a Roth IRA, they need to open their own and fund it with eligible income, or receive a spousal contribution.

The Divorce Exception

Divorce is the only situation where a Roth IRA can change hands between two living people. Under IRC Section 408(d)(6), transferring your interest in an IRA to a spouse or former spouse under a divorce decree or written separation agreement is not a taxable event.² No income tax. No early withdrawal penalty. The receiving spouse takes over the account or a specified portion, and the IRS treats those assets as though they had always belonged to that person.

A common misconception is that a Qualified Domestic Relations Order is needed to divide an IRA. It isn’t. QDROs apply to employer-sponsored plans governed by ERISA, such as 401(k)s and pensions. For an IRA, the divorce decree itself or a written instrument incident to the decree is enough, and most custodians accept either document.³

The transfer must happen through a direct trustee-to-trustee movement or a re-titling of the account into the receiving spouse’s name. An indirect rollover, where you withdraw the money and your ex-spouse deposits it into their own IRA within 60 days, does not qualify for the tax-free treatment.³ The IRS treats it as a taxable distribution to you, potentially triggering income tax on earnings and a 10% penalty if you’re under 59½. This is the single most expensive mistake people make during a divorce-related IRA split.

A divorce transfer does not count against the recipient’s annual contribution limit. The 2026 cap of $7,500, or $8,600 if you’re 50 or older, applies only to new contributions.⁴

How to Complete a Divorce Transfer

Contact the custodian holding the Roth IRA and request its transfer or change-of-ownership form. You will generally need to provide:

A certified divorce decree or written separation agreement
The custodian’s completed transfer form specifying the exact dollar amount or percentage
Account numbers for both the existing account and the recipient’s Roth IRA
The recipient’s full legal name, Social Security number, date of birth, and contact information

The dollar amount or percentage on the custodian’s form must match the court order exactly. Discrepancies between the two documents are the most common reason these requests get rejected. High-value transfers may require a medallion signature guarantee, which a bank or credit union can provide. Processing typically takes two to four weeks, and both parties receive written confirmation once the assets have moved.

Passing the Account to Beneficiaries at Death

When you die, your Roth IRA passes to whoever is named on the beneficiary designation form filed with the custodian. That form controls, not your will.⁵ If your will leaves everything to your current spouse but your beneficiary form still lists an ex-spouse or a deceased parent, the custodian follows the form.

A surviving spouse has the most flexibility of any beneficiary. They can roll the inherited Roth IRA into their own Roth IRA, effectively making it theirs, with the same contribution rules and no required minimum distributions during their lifetime.⁶ Alternatively, a surviving spouse can keep it as an inherited IRA if that fits better.

Non-spouse beneficiaries, whether children, siblings, friends, or trusts, must transfer the assets into an inherited IRA. The account registration should include the deceased owner’s name along with an indication that it is a beneficiary distribution account, followed by the inheritor’s name.⁷ Correct titling determines which distribution options are available.

Distribution Rules for Inherited Roth IRAs

The SECURE Act, effective for deaths occurring in 2020 or later, changed the timeline for non-spouse beneficiaries. Most must now empty the inherited Roth IRA by December 31 of the tenth year following the year of death.⁶ The older option to stretch distributions over the beneficiary’s own life expectancy is gone for most heirs.

There is one significant upside for inherited Roth IRAs. Because the original owner never reaches a required beginning date for distributions, the IRS treats the owner as having died before that date. Non-spouse beneficiaries owe no annual required minimum distributions during the ten-year window. You can take the money out all in year one, spread it evenly, or wait until the final year, so long as the account is empty by the deadline.⁸

Eligible Designated Beneficiaries

A narrow group can still stretch distributions over their own life expectancy instead of following the ten-year rule:

A surviving spouse
Minor children of the account holder, though the stretch lasts only until they turn 21, at which point the ten-year clock starts
Disabled or chronically ill individuals
Beneficiaries not more than 10 years younger than the deceased account holder

Everyone else, including adult children, friends, and most trust beneficiaries, falls under the ten-year rule.⁶

The Five-Year Holding Period

Contributions to an inherited Roth IRA always come out tax-free and penalty-free. Earnings depend on whether the original owner satisfied the five-year holding period. If the deceased first contributed to any Roth IRA at least five tax years before death, all distributions to beneficiaries, including earnings, are tax-free. If the clock had not been met, beneficiaries still withdraw contributions tax-free but owe ordinary income tax on any earnings they take out. No early withdrawal penalty applies in either case, because the distribution results from the owner’s death.⁶

The five-year clock runs from the original owner’s first Roth IRA contribution, not from the date the beneficiary inherits.

When No Beneficiary Is Named

If you die without a beneficiary designation on file, the Roth IRA typically becomes part of your estate. The assets go through probate, which is public, slow, and expensive. Heirs who inherit through the estate generally must empty the account within five years and lose the ability to stretch distributions over their life expectancy. Income taxes on earnings that might otherwise have come out tax-free, plus executor and attorney fees, can consume a meaningful portion of the account.

Reviewing the beneficiary form after any major life event, such as marriage, divorce, a birth, or a beneficiary’s death, prevents this. The form is filed with the custodian, and updating it is usually free.

Funding a Spouse’s Own Roth IRA Instead

Since you cannot transfer your Roth IRA to your spouse while you are both alive, the closest alternative is funding their own account. Under the Kay Bailey Hutchison Spousal IRA provision, you can contribute to a Roth IRA in your spouse’s name even if they have little or no earned income. The requirements are that you file a joint return and that your combined taxable compensation covers both contributions.⁹

For 2026, each spouse can contribute up to $7,500, or $8,600 if 50 or older, meaning a couple could put away as much as $17,100 combined. Roth IRA eligibility phases out between $242,000 and $252,000 of modified adjusted gross income for joint filers, and between $153,000 and $168,000 for single filers.⁴ This is not the same as transferring an existing balance, but it builds a separate tax-free pool for your spouse.

Workarounds That Backfire

People sometimes try creative routes to move Roth IRA money to someone else. Most of them cost more than they save.

Pledging a Roth IRA as collateral for a loan is the fastest way to destroy the account’s tax benefits. Under IRC Section 408(e)(4), any portion of an IRA used as security for a loan is treated as distributed to you immediately. You owe income tax on any earnings in that portion and a 10% penalty if you are under 59½. Broader prohibited transactions, such as lending IRA assets to a family member, can cause the entire account to lose its tax-exempt status, making the full balance taxable in a single year.²

Withdrawing funds and gifting the cash is legal but costly. You permanently lose the tax-free growth the money would have generated inside the Roth IRA, and the recipient just receives cash with no special tax treatment. Large gifts may also trigger federal gift tax reporting.

The indirect rollover trap in divorce is worth repeating. If a court orders you to give a former spouse a portion of your Roth IRA, use a direct trustee-to-trustee transfer or re-title the account. Taking the money out yourself and handing it over, even if the other person deposits it into their own IRA within 60 days, counts as a taxable distribution to you.³ The IRS has drawn a bright line here, and there is no after-the-fact fix.

1
Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs
2
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
3
Internal Revenue Service. Retirement Plans FAQs Regarding IRAs Distributions (Withdrawals)
4
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
5
Vanguard. Adding a Beneficiary: What You Need to Know
6
Internal Revenue Service. Retirement Topics – Beneficiary
7
Fidelity Investments. Inheriting an IRA From Your Spouse
8
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
9
Internal Revenue Service. Retirement Topics – IRA Contribution Limits