Community Property and Inherited IRAs in 2026: The 9-State Field Guide, Boggs v. Boggs, and Every QDRO Drafting Pattern

In August 1979, Dorothy Boggs of Louisiana died with a will that left her half community-property interest in her husband Isaac's pension to their three sons. Louisiana community-property law was clear: her half was hers to dispose of at death, and she had exercised that right. Isaac remarried Sandra a year later, retired in 1985, and died in 1989. When Sandra claimed the survivor annuity under ERISA §205 as Isaac's surviving spouse, the sons sued to enforce their mother's testamentary transfer of her community-property interest. They lost. In 1997, the Supreme Court held 5-4 that ERISA §514(a) preempted Louisiana's community-property regime as applied to the testamentary transfer of a non-participant spouse's community-property interest in an ERISA pension. Sandra took the full annuity. The sons took nothing.^[1]

That case, Boggs v. Boggs, is the load-bearing precedent for a paradox that governs retirement accounts in the nine community-property states: the state-law rule that gives a non-participant spouse a vested one-half interest in every pension and 401(k) contribution during marriage reaches the divorce court but does not reach the death of either spouse when the account is ERISA-covered. IRAs, by contrast, are not ERISA plans — and the community-property rule reaches them everywhere it reaches any other asset, subject only to IRC §408(g)'s narrow federal-tax carve-out and the surviving-spouse-rollover rules under §408(d)(3)(C).^[2] The result is a split-treatment regime inside a single decedent's estate: one rule for the 401(k), another for the IRA, and a QDRO under ERISA §206(d)(3) is the sole bridge between them.

This article is the field guide to how the nine community-property states — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin — treat retirement accounts at both divorce and death. It walks the pre-Boggs baseline, the four-part Boggs holding, the IRA carve-out that leaves the state rule fully in force, the §417 spousal-consent requirement that operates as a federal minimum over the top of state law, the QDRO drafting patterns that convert a divorce decree's community-property allocation into an enforceable order against the plan administrator, the domicile-change traps that preserve or destroy community character, and the state-by-state variations in how QDROs, waivers, and beneficiary designations must be executed. It closes with three worked case studies, a six-item mistake list, and an eight-item pre-death action checklist that a married participant in any of the nine states can act on before December 31, 2026.

1. What community property is, and what it is not

Community property is a marital-property regime, inherited by the Southwestern and Louisiana United States from the civil-law traditions of Spain, Mexico, and France, in which each spouse acquires an undivided one-half interest in property earned by either spouse during marriage. It stands in contrast to the common-law title-based regime that governs the other forty-one states, in which a spouse's earnings are separate property unless placed in joint title or gifted to the other spouse.^[3]

Three foundational rules define the regime:

• Earnings during marriage are community. Wages, salary, bonuses, commissions, self-employment income, contributions to retirement plans made from marital earnings, and business profits attributable to marital labor are community property from the moment they are earned. This is the load-bearing rule and the one that reaches retirement accounts.
• Property acquired before marriage or by gift or inheritance is separate. A 401(k) balance a spouse brought into the marriage is separate property. An inheritance received during marriage is separate property. Rental income from a separate-property rental house is separate in California, Nevada, Washington, and Wisconsin, but is community in Idaho, Louisiana, and Texas. This is the single largest inter-state variation.
• Community property may be converted to separate property (and vice versa) by written agreement. A prenuptial agreement under the Uniform Premarital Agreement Act (adopted in most CP states) or a postnuptial transmutation agreement executed with heightened disclosure and consent requirements can convert what would otherwise be community earnings into separate property. California Family Code §§850-853 and §1615 govern the California version; other states have parallel statutes.^[4]

The nine community-property jurisdictions are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska, Tennessee, Kentucky, Florida, and South Dakota have enacted opt-in community-property trust statutes that allow a couple to elect community-property treatment for specific property placed in trust, but they are not default community-property jurisdictions and do not apply community-property principles automatically to earnings.^[3]

2. Why retirement accounts are the epicenter of community-property law

Retirement plans and IRAs are the most valuable asset class in the average married American household after the primary residence. According to the Federal Reserve's 2022 Survey of Consumer Finances (the most recent triennial release, published October 2023), the median retirement-account balance among account-holding households aged 55-64 was $185,000, and the mean was $537,560; the top quartile of that age band held median balances above $500,000.^[5] Because retirement contributions are made from earnings during marriage, they are community property from dollar one — and they are typically the second-largest divisible asset after the marital home and often the largest, given that homes are frequently held in one spouse's separate name from a pre-marital purchase or an inherited down payment.

The community-property rule produces an unambiguous divorce outcome for the marital portion of a retirement account: each spouse is entitled to one-half of the community share, subject only to a fair-market valuation as of the date of separation (or, in states like California and Texas, the date of divorce judgment). This is why the phrase "50/50 state" is often loosely applied to community-property jurisdictions — the community half is bright-line divided, not equitably distributed by discretion of the court.

What complicates the picture is that retirement contributions during marriage frequently mix with pre-marital or gifted contributions. A participant who brought a $200,000 401(k) balance into a 12-year marriage and contributed $150,000 more during the marriage, with the whole account now worth $850,000, holds a mixed-character account. The community share is not $75,000 (half of contributions during marriage), and it is not $425,000 (half of the current balance). Under the tracing rules developed in cases like In re Marriage of Bergman, 25 Cal.App.3d 12 (1972), and codified in most CP states, the community share is calculated by tracing which portion of the current balance is attributable to community contributions and which to pre-marital contributions, with proportional attribution of investment growth.^[4] The math is non-trivial and generates most of the forensic-accountant billable hours in a community-property divorce with substantial retirement assets.

3. IRC §408(g): the narrow federal-tax carve-out

Congress enacted the individual retirement account provisions of the Internal Revenue Code in the Employee Retirement Income Security Act of 1974 with a specific carve-out from state community-property law. IRC §408(g) reads, in full:

26 U.S.C. §408(g)This section shall be applied without regard to any community property laws.^[6]

The provision is one sentence. Its scope is narrower than practitioners often assume. It provides that the federal-tax treatment of an IRA — who is treated as the contributor, who is treated as the account owner for RMD purposes, whose adjusted gross income is measured for deduction-phase-out purposes, who reports income on distribution — is determined without regard to state community-property law. Under §408(g), a working spouse in Texas who contributes $7,000 to a Traditional IRA is treated as the sole contributor and owner for federal tax purposes, even though under Texas Family Code §3.002 the contribution is community property.

What §408(g) does not do:

• It does not change the state-law property character of the account. Community property remains community property under state law.
• It does not override the surviving spouse's community-property claim against the deceased spouse's IRA at death. That claim is a state-law property claim, not a federal tax claim.
• It does not preempt state-law rules on divorce division of IRA balances. A community-property state's divorce court divides the community portion of the IRA under state law, and IRC §408(d)(6) then permits the transfer between spouses' IRAs pursuant to the divorce decree without federal tax consequence.
• It does not override the state-law requirement (in some CP states) that a married participant obtain spousal consent to name a non-spouse beneficiary of an IRA containing community funds.

The §408(g) carve-out is analogous to §26(a) of the Retirement Equity Act of 1984, which produced IRC §219(c) allowing a non-earning spouse to make a spousal IRA contribution based on the earning spouse's compensation, treating the compensation as available to both spouses regardless of state-law community-property character. Both provisions ensure that federal tax administration does not require reference to state marital-property law, but neither displaces state marital-property law for state-law purposes.^[6]

4. Boggs v. Boggs (1997): the case that fixed the ERISA rule

Isaac Boggs of Louisiana worked for South Central Bell for over three decades. His pension plan was governed by ERISA. He married Dorothy in 1949; they had three sons. Dorothy died in 1979. Her will devised her half community-property interest in Isaac's accrued pension benefits to their sons. Isaac remarried Sandra in 1980 and lived with her until his retirement in 1985, at which point he elected a joint-and-survivor annuity naming Sandra as the survivor annuitant. Isaac died in 1989. Sandra began receiving the survivor annuity. The sons sued to enforce Dorothy's testamentary transfer, arguing that under Louisiana community-property law they owned a share of the annuity from the moment their mother's will took effect in 1979.^[1]

The Fifth Circuit ruled for the sons. The Supreme Court reversed in a 5-4 opinion authored by Justice Anthony Kennedy. The Court held that ERISA §514(a) preempted Louisiana community-property law as applied to the testamentary transfer of a non-participant spouse's community-property interest in an ERISA plan. The holding rested on three integrated grounds:

• The surviving-spouse annuity provisions are exclusive. ERISA §205 (added by the Retirement Equity Act of 1984) requires that any ERISA-covered defined-benefit or money-purchase pension pay benefits in the form of a qualified joint and survivor annuity (QJSA) unless the participant elects otherwise with written spousal consent. That regime, the Court held, is the exclusive means by which a non-participant spouse takes a share of the participant's plan. State community-property law cannot create a parallel entitlement that reaches beyond the surviving spouse to the sons of a prior marriage.
• The anti-alienation rule reaches testamentary transfers. ERISA §206(d) prohibits assignment or alienation of plan benefits. The Court held that Dorothy's testamentary devise of her community-property interest constituted an "assignment or alienation" preempted by §206(d).
• Only a QDRO can transfer plan benefits. ERISA §206(d)(3) creates the QDRO exception to the anti-alienation rule. Because no QDRO had been entered for the sons' benefit, no assignment could be recognized by the plan.

Justice Breyer, joined by Justices Stevens, Ginsburg, and O'Connor, dissented. The dissent argued that ERISA was designed to protect participants and beneficiaries, not to override state-law property regimes governing the marital estate. The dissent's view has been echoed in academic literature but not adopted by any subsequent Supreme Court decision. Boggs remains the governing precedent.^[1]

5. The split-treatment problem: IRAs are not ERISA plans

Boggs governs ERISA plans. IRAs are not ERISA plans. Under Department of Labor Regulation 29 C.F.R. §2510.3-2(d), an IRA is not an "employee benefit plan" under ERISA §3(3) because it is not established or maintained by an employer for its employees.^[7] A rollover IRA that originally came from an ERISA-covered 401(k) loses its ERISA character on the rollover; the Supreme Court confirmed this in Patterson v. Shumate, 504 U.S. 753 (1992), in the bankruptcy-protection context, and lower courts have applied the same principle in the community-property preemption context.^[8]

Because IRAs are not ERISA plans, Boggs preemption does not reach them. Community-property law governs an IRA held by a married participant in a CP state on the same terms it governs any other financial asset. The surviving spouse's community-property claim at death, the divorce court's power to divide the community portion, and the state-law requirements on beneficiary designation all operate in full force. IRC §408(g) removes only the federal-tax measurement questions from state-law reference — it does not remove state-law property rules from the IRA itself.

The result is a jarring split-treatment inside a single decedent's estate. Consider a Texas physician who dies with a $2.4M ERISA-covered 401(k), a $600,000 IRA rolled from a prior employer's 401(k) seven years ago, and a $180,000 Traditional IRA contributed to during marriage. The 401(k) — Boggs preempted — pays entirely to the current spouse (if she is named beneficiary and she has not consented under §417 to another) or to whomever the participant has designated with §417 spousal consent, with no community-property claim by the estate of a predeceased first wife. The rolled-over IRA and the contributed-to Traditional IRA — not Boggs preempted — are subject in full to Texas community-property rules and can be reached by the estate of a predeceased first wife who held a community-property interest in the pre-rollover 401(k) contributions.

The practical consequence is that a divorcing participant with substantial retirement assets and children from a prior marriage often has a strong tax and estate-planning incentive to roll ERISA balances into IRAs post-divorce, precisely because the state divorce-revocation statute and the state-law community-property regime for prior-marriage claims reach the IRA and not the 401(k). Alternatively, a participant with no prior-marriage complications and a strong preference for protecting the surviving spouse against creditor and community-property claims by prior-marriage heirs has an equally strong incentive to keep balances inside the ERISA plan.

6. IRC §417 spousal consent: the federal minimum over the top of state law

ERISA §205 and IRC §417 together require that any ERISA-covered defined-benefit or money-purchase pension pay retirement benefits in the form of a qualified joint and survivor annuity (QJSA) — an actuarially equivalent annuity payable over the joint lives of the participant and the participant's spouse, with a survivor benefit of at least 50% of the participant's benefit — unless the participant elects otherwise with the spouse's written, notarized consent. For defined-contribution plans, §205 generally applies only to money-purchase pensions and target-benefit plans; 401(k) profit-sharing plans are exempted so long as the surviving spouse is the sole primary beneficiary of the participant's account balance, subject to the same written-consent requirement for a non-spouse beneficiary.^[9]

The §417 spousal-consent requirement operates in all fifty states, community-property or common-law. It is a federal statutory minimum that ensures a surviving spouse receives at least a survivor-annuity form of benefit or the account balance unless she affirmatively consents to another form. In a community-property state, §417 sits over the top of state community-property law: both must be satisfied.

The practical division between §417 consent and community-property waiver is often misunderstood, so it is worth stating precisely:

• §417 consent is a federal-law requirement for a married participant in an ERISA plan to name a non-spouse beneficiary. Its scope is the ERISA plan. Its form is a written, notarized (or plan-representative-witnessed) consent by the spouse. It is required in every state.
• Community-property waiver is a state-law contract by which the non-participant spouse waives her community-property interest in an asset. Its scope is the state-law community-property regime. Its form varies by state — California requires a writing with the formal requirements of a transmutation under Family Code §852; Texas allows a partition-and-exchange agreement under Family Code §4.102; Louisiana requires a matrimonial regime declaration under Civil Code Article 2329. Community-property waiver is required only in community-property states, and only for the community-property portion of the asset.

The two waivers are conceptually distinct but functionally combined. A well-drafted §417 consent form for a married participant in a community-property state will incorporate the community-property waiver by reference, with a separate signature line indicating that the spouse both consents to the beneficiary designation under §417 and waives her community-property interest in the plan under state law. A defective community-property waiver — for example, an unwitnessed consent in a state that requires notarization — will render the community-property waiver ineffective, leaving the community-property claim intact against the participant's estate at death even if §417 consent was validly obtained.

7. QDROs as the sole bridge: ERISA §206(d)(3) and IRC §414(p)

ERISA §206(d) prohibits assignment or alienation of plan benefits. ERISA §206(d)(3) creates one exception: a Qualified Domestic Relations Order (QDRO), which is a state-court order that assigns plan benefits to an "alternate payee." A QDRO is the sole mechanism by which the community-property interest of the non-participant spouse in an ERISA plan is converted from a state-law entitlement into an enforceable claim against the plan administrator.^[10]

ERISA §206(d)(3)(B) defines the required contents of a valid QDRO:

• The order must be "made pursuant to a State domestic relations law" and must relate to the provision of child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent.
• It must clearly specify: the name and last known mailing address of the participant and each alternate payee; the amount or percentage of the participant's benefits to be paid to each alternate payee; the number of payments or period to which the order applies; and each plan to which the order applies.
• It must not require the plan to provide any type or form of benefit not otherwise provided under the plan, must not require the plan to provide increased benefits determined on the basis of actuarial value, and must not require payment to an alternate payee of benefits already required to be paid to another alternate payee under a prior QDRO.

IRC §414(p) mirrors these requirements for federal tax purposes. Together, §414(p) and ERISA §206(d)(3) form the exclusive federal framework for QDRO administration.

In a community-property divorce, the QDRO is typically drafted to assign the alternate payee (the ex-spouse) her one-half community-property share of the accrued benefit as of the date of separation or divorce, with a "shared-payment" or "separate-interest" allocation depending on the plan type. For a defined-benefit pension, the "separate-interest" approach creates an independent annuity for the alternate payee measured over her own lifetime — the plan pays her a lifetime annuity even after the participant dies. For a defined-contribution 401(k), the QDRO typically directs an immediate rollover of the alternate payee's share into her own IRA, converting the ERISA balance into a non-ERISA rollover IRA.

8. State-by-state deep dive: California, Texas, Louisiana, Washington

The four largest community-property jurisdictions by population account for over 85% of the community-property-state retirement account balance in the United States. Their statutes and case law define the mainstream practice.

California (Family Code §§760, 770, 1000, 2610, 2550-2556)

Cal. Fam. Code §760 provides that "Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property." §770 defines separate property. §2610 is the key statute for retirement plans, requiring the court to divide community property retirement benefits by QDRO or the state analog. §2550 requires the court to divide community property equally. California case law — In re Marriage of Brown, 15 Cal.3d 838 (1976); In re Marriage of Gillmore, 29 Cal.3d 418 (1981) — established the time-rule approach for defined-benefit pensions, in which the community share is a fraction whose numerator is years of service during marriage and whose denominator is total years of service at retirement.^[12]

California requires a formal written waiver satisfying Family Code §852 (transmutation formality) for any spousal waiver of community-property interest in retirement plans. The California Judicial Council publishes a standard QDRO form (FL-460) that satisfies both ERISA §206(d)(3) and California §2610.

Texas (Family Code §3.002, §3.007, §7.001-7.003; Government Code §810.003)

Tex. Fam. Code §3.002 defines community property broadly. §3.007 addresses retirement plans, providing that the increase in a participant's separate-property retirement benefit attributable to community-property contributions or community-labor-generated growth is community property. Texas uses the "fractional-share" approach codified in §3.007(a)-(c) for defined-benefit plans.^[13]

Texas Fam. Code §4.102 authorizes partition-and-exchange agreements between spouses that can convert community property to separate property. §4.202 authorizes conversion of separate property to community property. Both must be in writing and signed. Texas does not require notarization but does require voluntary execution with disclosure. The Texas Employees Retirement System publishes a QDRO template that satisfies state and federal requirements.

Louisiana (Civil Code Articles 2334, 2338, 2349, 2374, 2375)

Louisiana is the outlier: its civil-law tradition, inherited directly from the Napoleonic Code, treats community property as a "legal regime" under La. Civ. Code Art. 2334 that spouses can opt out of by matrimonial agreement under Art. 2329. Retirement benefits earned during the community regime are community property under Louisiana case law extending back to Sims v. Sims, 358 So.2d 919 (La. 1978). Louisiana requires that a matrimonial regime declaration modifying the community-property regime be executed by authentic act (before a notary and two witnesses), a heightened formality unique to Louisiana.^[14]

Louisiana practice recognizes both "sundered benefit" and "co-owner-in-indivision" approaches to dividing community retirement benefits. The sundered-benefit approach directly divides the benefit at each payment date. The co-owner approach treats the ex-spouse as holding an undivided interest that pays out under the plan's terms. QDROs under Louisiana practice typically use the sundered-benefit approach for defined-benefit pensions and the co-owner approach for defined-contribution plans with immediate rollover.

Washington (Revised Code §§26.16.010-26.16.220, §26.09.080; Marriage Dissolution)

RCW §26.16.030 provides that "Property not acquired or owned as prescribed in RCW 26.16.010 and 26.16.020, acquired after marriage by either husband or wife or both, is community property." RCW §26.16.020 defines separate property. Washington case law — In re Marriage of Nuss, 65 Wn.App. 334 (1992) — established the "time-rule" fraction for defined-benefit pensions similar to the California approach.^[15]

Washington offers a unique planning tool under RCW §26.16.120: a Community Property Agreement (CPA) allowing spouses to convert all present and future property to community property with a right of survivorship on the first spouse's death. A CPA can convert separate-property retirement balances (including pre-marital IRA balances) into community property for both divorce and death purposes. It is one of the most powerful planning tools in Washington community-property practice, and it works asymmetrically with §408(g): the federal-tax character of the IRA does not change (the participant remains the sole federal-tax owner), but the state-law property character changes to community property, entitling the surviving spouse to the entire balance by right of survivorship regardless of the beneficiary designation.

9. State-by-state deep dive: Arizona, Nevada, New Mexico, Idaho, Wisconsin

The five smaller community-property jurisdictions each add distinctive twists.

Arizona (Revised Statutes §§25-211, 25-213, 25-318)

Ariz. Rev. Stat. §25-211 defines community property. §25-213 addresses separate property, including "profits, income, and increases" from separate property, which are separate in Arizona (contra Idaho, Louisiana, Texas). §25-318 governs equitable division at divorce; Arizona courts have discretion to allocate community assets non-equally on a showing of "excessive expenditures" or "concealment," a departure from the strict 50/50 rule of California.^[16]

Nevada (Revised Statutes §§123.220, 123.225, 125.150)

Nev. Rev. Stat. §123.220 defines community property. §125.150 provides that in divorce, the court must "make such disposition of the community property of the parties as appears just" and creates a presumption of equal division that can be rebutted by "compelling reasons." Nevada, like Arizona, permits deviation from strict 50/50 on evidence of misconduct or need.^[17]

New Mexico (NMSA §§40-3-8, 40-3-12; case: Ruggles v. Ruggles)

NMSA §40-3-8 defines community property. Ruggles v. Ruggles, 116 N.M. 52 (1993), is the leading New Mexico case on dividing retirement benefits at divorce, applying the time-rule fraction and creating a preference for immediate present-value distribution over deferred distribution when the marital estate is large enough to accommodate the offset.^[18]

Idaho (Idaho Code §§32-903, 32-906, 32-712)

Idaho Code §32-906 provides that "income" from separate property is community property during marriage — the opposite of California, Washington, Nevada, and Wisconsin. This makes Idaho unusually generous to non-earning spouses with wealthy separately-propertied working spouses; a $2M pre-marital brokerage account owned by one spouse produces community-property income that the non-earning spouse has a 50% claim on. Idaho Code §32-712 governs divorce division and creates a presumption of substantially equal division.

Wisconsin (Chapter 766 — Marital Property Act)

Wisconsin adopted the Uniform Marital Property Act in 1986 (effective January 1, 1986). Wisconsin uses the term "marital property" rather than "community property," but the substance is identical: earnings during marriage are held jointly by both spouses in a undivided one-half interest. Wisconsin is the only state to have adopted the UMPA verbatim; the other eight CP states rely on statutory schemes that predate the UMPA. Wisconsin's UMPA §766.61 addresses deferred compensation and retirement benefits specifically, providing that the marital portion is measured by the "acquired-during-marriage" fraction.^[19]

10. Domicile changes: the community-property character travels

Community property acquired in a community-property state retains its community character when the couple moves to a common-law state. This is the rule adopted by all nine community-property states and by the Uniform Disposition of Community Property Rights at Death Act (UDCPRDA), which has been enacted in about fifteen non-community states (Alaska, Arkansas, Colorado, Connecticut, Florida, Hawaii, Kentucky, Michigan, Montana, New York, North Carolina, Oregon, Utah, Virginia, and Wyoming, plus the U.S. Virgin Islands).^[20]

The UDCPRDA preserves the surviving spouse's half community-property interest at death for property that (a) was acquired as community property in a community-property state, (b) was brought into or acquired in the enacting non-community state, and (c) retains identifiable community character. The Act does not apply at divorce — only at death — and does not create community property in the enacting state; it merely respects community property that already exists from another state's regime.

The reverse problem is more common: a couple moves from a common-law state to a community-property state. Property acquired in the common-law state before the move is separate property under both regimes and retains that character. Earnings after the move are community. If the couple has been married for many years before the move, careful tracing is required to distinguish pre-move separate contributions from post-move community contributions to a retirement account. The California doctrine of "quasi-community property" under Family Code §125 addresses this: property acquired outside California that would have been community property if acquired in California is treated as quasi-community property for divorce and death purposes, effectively applying California community-property rules to marital-earnings property acquired anywhere during the marriage.

The domicile-change trap most likely to hurt a retirement participant is the mid-career move from Illinois or New York (common-law) to California or Texas (community). A 401(k) balance accumulated over fifteen years in Illinois is separate property under Illinois law; the participant may believe (and be told by an Illinois estate planner) that it remains separate on the move to California. Under California's quasi-community property rules, however, the accumulated balance is treated as quasi-community property for divorce purposes if the parties later divorce in California — the non-participant spouse acquires an implicit half-interest by virtue of the couple's California domicile at the time of divorce, even though no California earnings ever entered the account.

11. The step-up in basis: the one place community property clearly wins

IRC §1014(b)(6) provides that community property receives a full step-up in basis at the first spouse's death — both the decedent's half and the surviving spouse's half receive a basis adjustment to fair market value. This is a substantial tax advantage over common-law states, where under IRC §1014(a) only the decedent's half of jointly-titled property receives a step-up.^[21]

The rule applies to community-property assets outside retirement accounts: brokerage accounts, real estate, closely-held business interests, art, collectibles. It does not apply inside qualified retirement accounts or IRAs — those are governed by IRC §691 (income in respect of a decedent), which provides that inherited-IRA distributions retain their pre-death character as ordinary income to the beneficiary, and no basis step-up occurs on the pre-tax portion.

The practical implication for retirement planning in community-property states: the §1014(b)(6) double step-up creates a strong tax incentive to hold appreciated brokerage assets outside of retirement accounts, in a community-property titled brokerage account. On the first spouse's death, both halves receive a full basis step-up, and the surviving spouse can sell without capital-gains tax. In a common-law state with the same $2M appreciated brokerage account held in JTWROS title, only the decedent's half receives a step-up; the surviving spouse retains her original basis on her half and pays capital gains if she sells. Over a 30-year retirement, this difference can amount to hundreds of thousands of dollars in avoided capital-gains tax.

12. Three worked case studies

Case A — Priya, 48, Los Angeles software engineer, divorcing after 14 years

Priya brought a $180,000 401(k) balance into her 2011 marriage to Vikram. Over 14 years she contributed $210,000 more (all from community earnings) and the plan grew to $1,150,000 at date of separation in 2025. Vikram, a school administrator, has an $85,000 CalSTRS pension accrued during marriage — Priya has a community-property claim against his pension.

Under California Family Code §2610 and time-rule case law, Priya's 401(k) has a mixed character. Applying the "pro-rata" or "time-rule" approach: 14 of 24 years contributed from marriage (assuming Priya has worked and contributed continuously for 24 years), so 58.3% of the balance is presumptively community. But because Priya has documented her pre-marital $180,000 balance through Fidelity account statements, the forensic accountant can trace $180,000 (plus its proportional investment growth) as separate. Assuming the $180,000 grew to $415,000 by 2025 at 7.5% annualized growth, Priya's separate share is $415,000 and the community share is $735,000 — Vikram's community-property interest is $367,500.

The divorce settlement combines a QDRO transferring $367,500 to Vikram's IRA plus a QDRO transferring $42,500 of Priya's community-property interest in Vikram's CalSTRS pension (measured as a separate-interest annuity paying Priya starting at Vikram's normal retirement age). Priya rolls the remaining $783,000 into a rollover IRA within 60 days. Total federal tax cost: zero, because both transfers are QDRO-compliant under IRC §402(e)(1)(A) and §414(p).

Case B — Marcus and Elena, both 62, Houston, first marriage 30 years, planning for retirement and eventual death

Marcus, an oil-and-gas engineer, has a $2.8M ExxonMobil 401(k) and a $185,000 pension. Elena, a public-school teacher, has a $520,000 Texas Teacher Retirement System pension and a $95,000 Roth IRA. All contributions were made during the 30-year Texas marriage. Both spouses are 62; both plan to retire at 65 and live in Texas indefinitely.

At Marcus's eventual death, the 401(k) will pay in full to Elena as sole primary beneficiary — Boggs preemption means there is no possibility of a testamentary transfer of a community-property interest to their two adult children by any other party, and Marcus cannot devise the 401(k) balance to the children without Elena's §417 consent while she is alive. Elena will roll the balance to her own IRA under IRC §402(c)(9) and IRC §408(d)(3)(C), preserving the ability to name the children as designated beneficiaries subject to the SECURE Act 10-year rule.

Elena's Roth IRA contains community funds (contributed from marital earnings). If Elena predeceases Marcus, her Roth IRA passes to whomever she has named as beneficiary — but Marcus has a community-property claim against the $47,500 community portion (half of $95,000). If Marcus is named beneficiary, no conflict arises. If the two adult children are named beneficiaries, Marcus can assert a community-property claim against the estate for his $47,500 community-property share, reducing the children's distribution accordingly.

Recommendation: Elena's Roth IRA beneficiary form should either (a) name Marcus as sole primary beneficiary with the children as contingent beneficiaries, or (b) name the children with Marcus's written community-property waiver executed as a Texas partition-and-exchange agreement under Family Code §4.102 attached to the beneficiary form. Option (b) preserves flexibility to leave the Roth to the children while eliminating the community-property claim.

Case C — David, 74, Phoenix, second marriage 12 years; first wife died in 2013 leaving a will devising community-property interest to their four adult children

David worked as a hospital administrator in Arizona for 40 years. His first wife Rachel died in 2013 after a 28-year marriage. Rachel's will devised her community-property interest in David's $1.9M 401(k) and $340,000 IRA to their four adult children in equal shares. David remarried Sarah in 2013 and lived with her for the subsequent 12 years. David died in August 2026.

Under Boggs preemption, Rachel's testamentary transfer of her community-property interest in the $1.9M 401(k) is void as against the plan. The 401(k) passes entirely to Sarah as named beneficiary. Rachel's four children take nothing from the 401(k). This is the exact fact pattern Boggs was decided on, applied to Arizona rather than Louisiana law.

The $340,000 IRA is different. IRAs are not ERISA plans, so Boggs preemption does not apply. Rachel's community-property interest in the pre-2013 IRA contributions passes through her estate to the four adult children under Rachel's will. If the IRA balance at Rachel's 2013 death was $210,000 (of which the community share attributable to contributions during the 1985-2013 marriage was, say, $180,000), Rachel's half-interest of $90,000 passes through her estate. The four children collectively hold a $90,000 community-property claim against David's estate, enforceable in Arizona probate court against David's IRA balance.

Practically, the executor of David's estate must trace which IRA contributions were made during the Rachel marriage (traceable to community earnings) versus during the Sarah marriage (also community, but Sarah's community). The $90,000 pre-2013 claim is a probate creditor of the estate and must be satisfied from IRA distributions after any spousal-rollover election by Sarah. If Sarah rolls the IRA to her own IRA under §408(d)(3)(C) before the claim is asserted, the four children's claim may be defeated by the rollover — this is a serious risk for the children and requires early assertion of the claim.

13. Six mistakes that destroy community-property planning at death

Mistake 1: Naming a non-spouse beneficiary of an IRA without written spousal consent

In all nine CP states, a surviving spouse retains a community-property claim against the deceased spouse's IRA to the extent the IRA contains community funds — unless the surviving spouse has executed a written waiver satisfying state formality requirements. Merely naming the non-spouse beneficiary on the custodian's beneficiary form is not a waiver. The custodian will pay the named beneficiary, but the surviving spouse can then sue the beneficiary or the estate for her community-property share.

Mistake 2: Assuming §417 consent is a community-property waiver

§417 consent is an ERISA/IRC requirement. It waives the surviving-spouse annuity form of benefit under §205. It is not a community-property waiver, and it does not extend to IRAs. A married participant in a CP state who executes §417 consent for a 401(k) non-spouse beneficiary designation still needs a separate community-property waiver for IRAs.

Mistake 3: Failing to update beneficiary designations after moving into a community-property state

Beneficiary designations executed in a common-law state before a move to California, Texas, or another CP state remain in force after the move but do not carry a spousal-consent that would satisfy state community-property requirements. A designation from a New York attorney's estate plan naming the participant's adult children as IRA beneficiaries, executed before a move to California, is now enforceable only against the participant's separate-property portion of the account — the surviving spouse has a community-property claim against the post-move community-property contributions.

Mistake 4: Ignoring the tracing problem for mixed-character retirement accounts

A retirement account with pre-marital contributions, community contributions, and post-divorce/re-marriage community contributions has three character layers. Failing to trace the layers means the surviving spouse's community claim is either overstated (asserted against separate-property contributions from before marriage) or understated (missed against a portion of the account the executor did not identify as community). The forensic-accountant cost of proper tracing is often $5,000-$20,000 but preserves substantial value for the correct claimant.

Mistake 5: Rolling over an ERISA 401(k) to an IRA and losing Boggs protection

A participant who rolls a $1.5M ERISA 401(k) to a rollover IRA immediately after divorce may believe the rollover is tax-neutral and character-neutral. It is tax-neutral (IRC §402(c)) but not character-neutral: the IRA loses ERISA preemption and becomes subject to state community-property claims by an ex-spouse's estate or by a prior-marriage estate. If the participant remarries and the second spouse also has community-property claims against subsequent contributions, the character layers become tangled. Some participants deliberately preserve the ERISA character (by leaving the balance in the plan or by moving it to a new employer's plan) precisely to preserve Boggs preemption.

Mistake 6: Missing the 30-day post-divorce beneficiary-update window

Community-property law and Boggs preemption are complex, but the single most important post-divorce action is trivially simple: file a new beneficiary designation naming the ex-spouse out of every retirement account within 30 days of the divorce decree. This defeats the vast majority of failure modes — the community-property claim, the §417 consent problem, the Kennedy waiver problem, and the state divorce-revocation statute problem — because the beneficiary of record is the correct beneficiary. Every retirement custodian will accept a new beneficiary form; the process takes ten minutes per account.

14. The 8-item pre-death action checklist for community-property participants

1. Inventory every retirement account by character. For each 401(k), 403(b), pension, IRA, and Roth IRA, document: (a) pre-marital balance, if any, with account statements from date of marriage; (b) community contributions during marriage; (c) date of any domicile change into or out of a community-property state; and (d) current beneficiary designation on file.
2. Confirm every beneficiary designation matches your current intent. Retrieve beneficiary forms from each custodian directly — do not rely on the estate-planning binder in your file cabinet. Custodian records govern; your file cabinet does not.
3. Execute §417 consent + community-property waiver in a single document for any non-spouse beneficiary designation. Use a form drafted by an attorney licensed in your state, incorporating both federal §417 consent language and state-specific community-property waiver language (California §852 transmutation formality, Texas §4.102 partition-and-exchange, Louisiana Article 2329 authentic act, etc.).
4. Consider a written community-property agreement or partition agreement for pre-marital retirement balances. A properly executed agreement can convert community-character contributions to separate property (or vice versa) and eliminate ambiguity at death. In Washington, a Community Property Agreement can achieve both spouses' estate-planning goals in a single document.
5. Coordinate the ERISA plan and IRA beneficiary designations. The split-treatment problem is neutralized if the same beneficiary is named on both types of accounts and no §417 consent issue exists. Naming the surviving spouse as sole primary beneficiary of both the 401(k) and the IRA sidesteps community-property claims by any prior-marriage estate and simplifies administration.
6. Review beneficiary designations at every major life event. Marriage, divorce, birth of children, death of a beneficiary, and every domicile change trigger a beneficiary review. Set a calendar reminder for annual January review.
7. Consider a rollover strategy calibrated to Boggs preemption. If you have children from a prior marriage and want to leave them a share of a 401(k) balance, keep the balance in the ERISA plan and use a QDRO structure — do not rely on a testamentary transfer of a former spouse's community-property interest, which Boggs makes unenforceable. If you have no prior-marriage complications and want the surviving spouse to inherit fully, either the ERISA plan or a rollover IRA works, but a rollover IRA exposes the balance to community-property claims by the surviving spouse's own future estate that Boggs would preempt.
8. Document domicile changes with contemporaneous evidence. Driver's license, voter registration, homestead exemption, primary-residence declaration under Fla. Stat. §222.17 or Nev. Rev. Stat. §41.191, will and healthcare directives, and majority-year physical-presence records establish the domicile that governs your retirement accounts under §408(g) and state community-property law. In California and New York, the state tax authorities audit domicile aggressively; contemporaneous evidence is the only defense.

15. State-by-state summary table

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