2025 Guide: Can Your Ex-Spouse Still Inherit Your IRA After Divorce?

It’s a common misconception that a divorce automatically changes the beneficiary on an IRA. In reality, divorce alone does not update beneficiary designations unless explicitly stated in the divorce decree. Many IRA owners unknowingly leave their ex-spouse named as the beneficiary simply by overlooking this important update.

Without a legal instrument such as a qualified domestic relations order (QDRO), the ex-spouse named on the IRA will typically remain entitled to the assets upon the owner's passing. This is especially true if the IRA custodian’s records still list the former spouse as the primary beneficiary at the time of death.

When disputes arise, surviving spouses may challenge the beneficiary designation in court. During such proceedings, IRA custodians generally freeze asset distribution until a judicial decision is made, then comply accordingly. Absent any dispute, the custodian proceeds with the payment to the recorded beneficiary.

Key Insights to Remember

• Divorce does not automatically revoke or change IRA beneficiary designations unless the court order specifies it.
• In community property states, ex-spouse beneficiary designations may be invalid if the current spouse did not consent.
• Failing to update beneficiary information post-divorce is a common cause of unintended asset transfers.
• Addressing IRA ownership and beneficiary changes during divorce prevents surprises and legal complications after death.

Community Property State Considerations

Residents of community property states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—face additional complexities. If the IRA owner does not name their current spouse as the sole beneficiary, the ex-spouse’s claim might be invalid without the current spouse’s approval.

In these states, the surviving spouse’s claim may be limited to the portion of the IRA considered marital property, often capped at 50% of assets accrued during the marriage.

Dividing IRA Assets During Divorce

The most effective solution is to handle IRA division proactively during divorce proceedings. This approach eliminates unexpected inheritance issues and can provide significant tax benefits.

Properly executed trustee-to-trustee transfers during divorce can qualify as tax-free moves, avoiding penalties and preserving retirement savings. However, these transfers require precise paperwork and expertise; consulting a financial professional is highly recommended to ensure compliance and avoid costly mistakes.

When Might You Keep Your Ex-Spouse as Beneficiary?

While changing beneficiaries post-divorce is typical, some divorce agreements may require the ex-spouse to remain the IRA beneficiary. In the absence of such a stipulation, it’s prudent to designate a new beneficiary—often children, siblings, or a new spouse upon remarriage—to secure your financial legacy.

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