How are IRAs treated in community property states?

It actually stands for Individual Retirement Arrangement, but, that aside, it's yours until you die or until a QDRO forces you to split it while alive. I believe.

It is individual in that it is in your name alone. However if you are married in a community property state, your spouse may have a community property interest in it. In other words she could force you to pay her some of what is in there if you divorce.

Minor quibble: A QDRO covers e.g., employee plans, but they do not cover IRAs. So I call it a QDRO-like order :^)

The owner is the individual. Under the laws of the 9 CP states, a spouse has a CP interest in an IRA.

Upon obtaining a divorce the proper way to transfer the funds is a trustee to trustee transfer. If the owner takes possession of any distribution before handing it over to the spouse, it will be taxed to the owner.

The trustee will require a court order to make the transfer to the spouse's IRA. Pension plans protected by ERISA require a QDRO (Qualified Domestic Relations Order). IRAs do not. However, in my experience there are a variety of trustees out there who will only accept a QDRO.

The prudent individual should ask the trustee of the IRA for the requirements.

And after a bit of searching -

QDRO's are not needed to transfer IRAs from one spouse to another spouse. Funds from one spouse's IRA can be rolled over tax-free into an IRA set up by the other spouse as long as the settlement agreement specifies it. To be safe, the settlement agreement should clearly specify that the transfer of IRA funds is required as part of the property settlement that is intended to be tax-free under Internal Revenue Code Section 408(d)(6).Again, the best way to achieve this is through a trustee-to-trustee transfer.

Right you are, Art, (no surprise) and I leave this board a bit smarter than I woke up this morning. Thanks.

To add to the previous answers, which seem more focused on transfers incident to divorce, here's a quote from the IRS IRM regarding the nature of regular distributions from IRA's in community property states:

"IRA withdrawals and related penalties. Individual retirement accounts by law are deemed to be separate property. Therefore, taxable IRA distributions are separate property, even if the funds in the account would otherwise be community property. The withdrawal and any penalties are wholly taxable to the spouse whose name is on the account. Bunney v. Commissioner , 114 T.C. 259 (2000); Morris v. Commissioner, T.C. Memo.

This is why the owner does not want to take a distribution to provide the CP interest to the former spouse. It is the reason why it must be done trustee to trustee.