Interesting topic and only posting to get insight from others (Hello Alan!) that may have found themselves addressing the same situation or not. A woman seeks and receives an annulment due to the other party still being married to another woman. The parties have a “property settlement agreement” drawn up to voluntarily separate property acquired during their “relationship.” In this document the woman voluntarily agrees to transfer a portion of her IRA to the other party’s IRA.

A law firm representing the other party has submitted a very legal sounding letter in effect attempting to execute this voluntary transfer from the woman’s IRA to the other party.

IRC 408 (d)(6) states the following:
>>>>
Transfer of account incident to divorce

The transfer of an individual’s interest in an individual retirement account or an individual retirement annuity to his spouse or former spouse under a divorce or separation instrument described in subparagraph (A) of section 71(b)(2) is not to be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest at the time of the transfer is to be treated as an individual retirement account of such spouse, and not of such individual. Thereafter such account or annuity for purposes of this subtitle is to be treated as maintained for the benefit of such spouse.

and IRC 1041 Transfers of Property Between Spouses or Incident to Divorce

(a) General rule

No gain or loss shall be recognized on a transfer of property from an individual to (or in trust for the benefit of)—
(1) a spouse, or
(2) a former spouse, but only if the transfer is incident to the divorce.
(b) Transfer treated as gift; transferee has transferor’s basis

In the case of any transfer of property described in subsection (a)—

(1) for purposes of this subtitle, the property shall be treated as acquired by the transferee by gift, and
(2) the basis of the transferee in the property shall be the adjusted basis of the transferor.
(c) Incident to divorce

For purposes of subsection (a)(2), a transfer of property is incident to the divorce if such transfer—

(1) occurs within 1 year after the date on which the marriage ceases, or
(2) is related to the cessation of the marriage.
>>>>
In this case there is no divorce or divorce decree, as at the moment the marriage legally never occurred. The IRC has no provision for voluntarily transferring a portion of an IRA outside of a divorce or the death of the primary owner. Correct?