Do I Need My Wife's Consent for an IRA Beneficiary in Ohio?

Choosing a beneficiary for your IRA is a crucial estate planning step. It is common for a married man to name his wife as beneficiary, but this is not always the case. As an Ohio resident, neither federal nor state law requires you to get your wife's consent in this situation. However, your bank might have a policy that requires you to obtain your wife's signature before you can name a nonspouse beneficiary.

Federal Law

Under the Employee Retirement Income Security Act of 1974 (ERISA), federal law requires you to designate your spouse as beneficiary for your 401k. If you want another person to inherit your 401k, your spouse has to sign a written waiver of her rights.

ERISA does not cover IRAs; therefore, no federal mandate exists that requires you to name your spouse as an IRA beneficiary. Also, no federal requirement exists that you must obtain your spouse’s consent if you decide to name someone else as beneficiary of your IRA.

Ohio Law

In community property states, such as California and Washington, you are required to get your spouse’s permission before naming someone else as beneficiary of your IRA. Ohio is a common law state and not a community property state; therefore, Ohio law allows you to name a different beneficiary without your spouse’s consent.

Bank Policy

Although federal law and Ohio law allow you to designate a nonspouse beneficiary for your IRA without your spouse’s consent, your bank might have its own policy. Many financial institutions choose not to distinguish between common law and community property states. These banks require all married account holders, regardless of state, to get their spouse’s signature before naming someone else as an IRA beneficiary.

Considerations

Remember that your beneficiary designation, and not the terms of your will or trust, determines who will inherit your IRA when you pass away. Check your beneficiary designation each time you update your estate plan to make sure your property goes to the appropriate recipients.

References

• Elder Law Answers; Do Surviving Spouses Have a Right to a 401k or an IRA; December 2010
• Banking Questions.com: Naming Someone Other Than Spouse as IRA Beneficiary
• Bankrate.com; Community Property, Common Law, Assets and Debts; Jay MacDonald
• Nolo: Eight Ways to Avoid Probate: Name A Beneficiary for Your Retirement Accounts