Beneficiary

• When you establish an IRA, you can choose one or more IRA beneficiaries. The beneficiary has no ownership claim on the account while you are alive but assumes full control of the IRA proceeds when you die. State laws vary about the number of beneficiaries you can add to your account. If you add multiple beneficiaries to your IRAs, you must specify the percentage of the account that should go to each of the beneficiaries. Generally, if your IRA custodian does not require you to specify how you want to split the money, the funds are equally split among beneficiaries when you die.
  
  

Contingent Beneficiaries

• You can also name contingent beneficiaries on your IRA. A contingent beneficiary has no claim on your account unless the primary beneficiaries die before you die. If that occurs, the contingent beneficiary becomes the primary beneficiary and assumes control of the account upon your death. IRAs with beneficiaries do not have to pass through probate, so naming both primary and contingent beneficiaries on your account allows your heirs to avoid court costs and gain faster access to your money.
  
  

Spousal Consent

• Many states have community or marital property laws requiring that your individually owned assets pass to your spouse when you die. In such states, your spouse takes possession of your IRA when you die even if you do not add your spouse's name as a beneficiary. You can name someone other than your spouse as beneficiary, but only if your spouse consents by signing an IRA spousal consent form. Your spouse waives all rights to your IRA by signing the form.
  
  

Considerations

• While you and your spouse cannot jointly open an IRA, if you file your taxes jointly, you have an impact on each other's ability to even invest in an IRA. Roth IRAs, which contain after-tax earnings, have income restrictions and you cannot contribute to a Roth if you and your spouse's combined income exceeds annually determined limits. Your spouse's income also limits your ability to deposit funds into a traditional IRA -- even if you file your taxes separately -- if either of you has access to an employer-sponsored retirement plan. As of 2011, if you are married but file taxes separately, you can only contribute to an IRA if your adjusted gross income amounts to less than $10,000. Therefore, IRAs are individually owned but affected by both your and your spouse's income.