Your estate, and how your assets are distributed after you pass, can be in jeopardy if you don't regularly update your financial arrangements, particularly your beneficiary designations. If you are estranged from your spouse, she can still inherit your individual retirement account (IRA) -- unless you can come to amicable terms before your death.
Your spouse's rights to your individual retirement account (IRA) are contingent upon several important factors, none of which are affected by estrangement. These include factors such as who the designated beneficiary is, when contributions to the account were made, who made the contributions, and whether you and your spouse reside in a community property state. The combination of these will often determine whether your estranged spouse can inherit your IRA.
If you named your spouse as the beneficiary on your account, and have not changed this designation, then your spouse stands to inherit your IRA after your death. However, your ability to name a beneficiary other than your spouse will be determined by whether the contributions were made to the account, who made the contributions, and where you and your spouse live.
An IRA you contributed to during the period of your marriage is considered community property, as long as you and your spouse live in a a community property state. However, contributions made to the IRA in question prior to your marriage are not considered community property, and are free for you to leave to another beneficiary. In the event that some contributions were made prior to the marriage, while others were made during the marriage, then your estranged spouse is entitled to half of the proceeds contributed during the marriage.
An IRA account you inherited prior to your marriage, or inherited after your marriage but in your name only, is not considered part of your marital property. Therefore, your estranged spouse has no right to this IRA in the event that you have made someone else the beneficiary.
Community Property States
Whether you and your spouse live in a community property state will likely determine whether your spouse inherits your IRA after your death. If you live in Arizona, California, New Mexico, Nevada, Idaho, Washington, Texas, Wisconsin or Louisiana, then your spouse is automatically entitled to half of your IRA. In a community property state, the only way to leave your IRA to another beneficiary is by getting written consent from your spouse, regardless of whether you are estranged. In the event your spouse does not consent, your named beneficiary is entitled to inherit only half of the IRA.
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