Trusts and Estates

Ca. Trs. & Estates Quarterly 2020, Volume 26, Issue 3

APPLICATION OF "SPOUSAL CONSENT RULES" TO COMMUNITY PROPERTY INDIVIDUAL RETIREMENT ACCOUNTS

By Paul H. Miller*

MCLE Article

I. INTRODUCTION

This article discusses the application to community property ("CP") Individual Retirement Accounts ("IRAs")1 of sections 5000 through 5032 of division 5 of the California Probate Code, the division governing nonprobate transfers. I refer to these statutes as the "Spousal Consent Rules."2 These statutes ensure that if the vested owner of a CP IRA exercises the right under federal law to transfer 100% of the IRA to the beneficiary that the owner specifies, the other spouse has the right to set aside the owner’s transfer of 50% of the IRA and to transfer the value of that CP interest to different beneficiaries. The spouse may direct the disposition of a CP interest in an IRA, even though federal law does not allow a direct transfer of that interest from the IRA.3

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