A:

It depends.

Generally speaking, the designation of beneficiary form dictates who receives the assets from the individual retirement account (IRA). Therefore, no one else is entitled to receive any share of the IRA unless the named beneficiaries choose to disclaim their portions. However, if the IRA contributor resides in a community property state and the spouse did not approve the designation of beneficiary, he or she may be entitled to a portion of the IRA. Under the laws of these states, the spouse must be the primary designated beneficiary, unless he or she consents to another party being the primary designated beneficiary. The community and marital property states are Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

If the contributor resides in one of these states, you'll need to check with the custodian to determine whether the proper approval was obtained from you (as the contributor's spouse). If the proper approval was obtained or if the contributor did not reside in one of these states, then the designated beneficiaries will be able to take possession of your share of the IRA.

Note that even if the contributor resides in a community property state, the IRA (or a portion of it) may still not be subject to the community property laws if the balance was accrued before the person was married. To be sure, check with a local attorney who specializes in estate planning or tax law.

(For more on IRA beneficiary designations, see Update Your Beneficiaries and Problematic Beneficiary Designations - Parts 1 and 2.)

This question was answered by Denise Appleby founder of Appleby Retirement Consulting Inc.
(Contact Denise)

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