Can You Transfer an IRA to Another Person? Divorce, Death, Charity

You cannot transfer an IRA to another person the way you would retitle a car or add a name to a bank account. Federal law treats every IRA as belonging to one individual, and the tax advantages disappear the moment ownership shifts outside three narrow exceptions: divorce, death, and certain direct gifts to charity. Everything else the tax code treats as a taxable withdrawal by you, followed by whatever you chose to do with the cash.

Why the Law Blocks a Voluntary Transfer

Every IRA rests on one line in the tax code: the account must be maintained “for the exclusive benefit of an individual or his beneficiaries.”¹ One person owns the account, one person got the tax break for funding it, and no one else can step into that role while the owner is alive. You cannot add a co-owner, sign the account over to an adult child, or retitle it in a friend’s name. Custodians will not process the request because the IRS will not recognize it.

What Happens If You Try Anyway

Attempt to give an IRA to someone during your lifetime and the IRS treats the entire account as distributed to you. You owe ordinary income tax on the full amount, which can push you into a higher bracket by itself. If you are younger than 59½, add a 10% early withdrawal penalty on top.² On a $200,000 balance, the penalty alone is $20,000 before income tax even enters the calculation.

Your custodian reports the distribution to the IRS on Form 1099-R, so nothing about the move stays quiet.³ If you then hand the cash to another person, gift tax reporting can enter the picture. For 2026, gifts up to $19,000 per recipient require no return; anything above that does, though actual gift tax typically only kicks in after millions in lifetime giving.⁴

A quieter version of the same mistake is pledging your IRA as collateral for a loan. The tax code treats any portion pledged as security as distributed to you.¹ Income tax and potentially the 10% penalty apply to the pledged amount even though not a dollar left the account. Lenders will not warn you.

Transferring an IRA to a Spouse in Divorce

Divorce is the one situation where IRA assets move from one living person to another with no tax consequence. The transfer must happen under a divorce decree or written separation agreement, and the recipient must be a spouse or former spouse.¹ Once complete, the IRA is treated as having always belonged to the receiving spouse. They control the investments, take the distributions, and owe the eventual taxes.

Two methods work. The first is changing the name on the existing IRA from yours to your former spouse’s, appropriate when the whole account is going to them. The second is a direct trustee-to-trustee transfer, in which the custodian moves a specific dollar amount or percentage into a new IRA in the former spouse’s name.² Both are tax-free. What does not work is withdrawing the money yourself and redepositing it into the ex-spouse’s IRA within 60 days. The IRS has said explicitly that an indirect rollover does not qualify, even if the cash reaches the right account on time.

The decree needs enough specificity for the custodian to act on it: the exact dollar amount or percentage, both account numbers, and the receiving spouse’s identifying information. Vague language about a “fair share” or “equitable split” gets rejected, and an amended order becomes necessary. No federal deadline governs completion, but delays carry risk. Market moves change the account value, and if either party dies before the transfer, the situation becomes considerably harder.

How an IRA Passes to a Beneficiary After Death

Death is the other main route by which IRA assets reach a new person. The process starts with the beneficiary designation form on file with the custodian, not the will. This is where planning fails most expensively: if the form still names an ex-spouse from fifteen years ago, the custodian honors the form regardless of what your will says. Keeping the designation current matters more than almost any other estate planning step.

To claim the account, the beneficiary submits a certified copy of the death certificate to the custodian along with their own identifying information. The custodian then opens an “inherited IRA” in the beneficiary’s name, with the account title reflecting both the beneficiary and the deceased owner. Assets remain tax-advantaged through this step, so the transfer itself generates no tax. The tax bill comes later, when distributions start.

Federal estate tax is not a concern for most estates; the 2026 exemption is $15,000,000 per person, so estates below that threshold owe nothing.⁴ The live issue for beneficiaries is income tax on the distributions they must take.

The 10-Year Rule for Non-Spouse Beneficiaries

If the original owner died in 2020 or later, most non-spouse beneficiaries must empty the inherited account by the end of the tenth year after the owner’s death.⁵ This SECURE Act rule replaced the older “stretch IRA” approach that let beneficiaries spread distributions over their own life expectancy.

One wrinkle trips people up. If the owner died after they had already started taking required minimum distributions (currently required at age 73), the beneficiary must take annual distributions during the ten years. Letting the balance sit and cashing out in year ten is not allowed. If the owner died before reaching RMD age, timing within the ten-year window is flexible, but the account still has to be empty by the deadline.⁶

Five categories of beneficiary can still stretch distributions over their own life expectancy:⁵

A surviving spouse, who has the most flexible options and is covered separately below.
A minor child of the deceased owner, who can stretch distributions until reaching the age of majority, at which point the 10-year clock starts.
A disabled individual, as defined under the tax code.
A chronically ill individual, as certified by a physician.
A person not more than 10 years younger than the deceased, such as a sibling close in age.

Everyone else falls under the 10-year rule, including adult children, grandchildren, friends, and non-individual beneficiaries such as charities or estates, which have their own, often faster, distribution requirements.

Extra Options for a Surviving Spouse

A surviving spouse has choices no other beneficiary gets. The most powerful is treating the inherited IRA as their own, either by rolling the assets into an existing IRA in their name or by redesignating the inherited account.⁶ After that step the account follows the surviving spouse’s own RMD schedule and beneficiary designations, and they can keep contributing if they have eligible income. It functions as an account they opened themselves.

Keeping the account titled as inherited is the better move for a surviving spouse under 59½ who needs access to the funds. Distributions from an inherited IRA are not subject to the 10% early withdrawal penalty; distributions from an IRA rolled into the spouse’s own account are, if the spouse is under 59½. A younger surviving spouse can take what they need from the inherited account penalty-free, then roll the rest into their own IRA once they turn 59½.

For an inherited Roth, the surviving spouse also has the option to treat the account as their own, and qualified Roth distributions are tax-free. If the Roth is less than five years old, earnings withdrawn before that threshold is met may be taxable.⁵ The choice between rollover and inherited treatment is permanent, so it deserves attention before you act.

Giving IRA Money Directly to a Charity

At age 70½ or older, you can move money from your IRA directly to a qualified charity with no income tax on the amount. This is called a qualified charitable distribution. For 2026, the limit is $111,000, and a separate one-time option lets you direct up to $55,000 to a charitable remainder trust or charitable gift annuity.⁷

The money must go straight from the custodian to the charity. If a check passes through your hands first, it becomes a regular taxable distribution. The donation also counts toward your required minimum distribution for the year, which makes it a useful strategy for someone who does not need the full RMD to live on.⁸ You get no charitable deduction, because the income was never included in the first place, but the tax math generally beats taking the distribution, paying tax on it, and then claiming a deduction.

Refusing an Inherited IRA

Sometimes inheriting an IRA creates more problems than it solves. If the required distributions would land in a high tax bracket, or if passing the assets to the next person in line fits the family better, a qualified disclaimer lets you refuse the inheritance. Disclaimed assets pass to whoever is next on the beneficiary designation, as if you had never been named.

The requirements are strict:⁹

The disclaimer must be in writing and delivered to the IRA custodian within nine months of the owner’s death.
You cannot have accepted any benefit from the account, including taking a distribution, changing investments, or paying bills from it.
The assets must pass to someone else without you choosing the recipient.
If the person disclaiming is under 21, the nine-month clock starts when they reach that age.

No mechanism exists for extending the nine-month deadline. Miss it by a day and the disclaimer fails, meaning you are treated as having accepted the assets and are bound by all the distribution rules. If a disclaimer is on the table, act quickly and leave the account untouched.

1
Office of the Law Revision Counsel. 26 USC 408 Individual Retirement Accounts
2
Internal Revenue Service. Retirement Plans FAQs Regarding IRAs Distributions (Withdrawals)
3
Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
4
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
5
Internal Revenue Service. Retirement Topics – Beneficiary
6
Internal Revenue Service. Publication 590-B, Distributions From Individual Retirement Arrangements
7
Internal Revenue Service. Notice 25-67: 2026 Amounts Relating to Retirement Plans and IRAs
8
Internal Revenue Service. Important Charitable Giving Reminders for Taxpayers
9
Office of the Law Revision Counsel. 26 USC 2518 Disclaimers