Adding a Beneficiary to Your Account


Designating a beneficiary

Why designate a beneficiary?

Designating a beneficiary on an account can be a simple way to define how you wish for your assets to be transferred after your death.

  • For accounts with beneficiaries, assets can transfer directly to them and potentially avoid going through the probate process. Avoiding probate could save both time and money for intended beneficiaries.
  • For accounts without beneficiaries, assets generally pass to the decedent’s estate or to default beneficiaries for certain retirement accounts.

Account owners should review their account information regularly or work with their estate planner or advisor to ensure that their assets are set up to transfer the way they are intended.

Primary and secondary beneficiaries:

There are no limits to the number of beneficiaries on an account, and generally, there are two types.

  • Primary beneficiary: This is an individual or entity that is designated to receive assets upon the account owner’s death. An account owner may designate any number of primary beneficiaries and assign a percentage of the assets to each beneficiary.
  • If there are multiple account beneficiaries and any of them predeceases the account owner, those shares will be divided pro rata among the remaining beneficiaries, with the exception of a lineal descendants or nonlineal descendants.
  • Secondary beneficiary: A secondary or contingent beneficiary is an individual or entity that is designated to receive account assets if all primary beneficiaries have predeceased the account owner(s).

The steps to add a beneficiary differ based on the account type

Adding a beneficiary designation — nonretirement accounts:

If you hold an individual or joint tenancy with rights of survivorship (JTWROS) account, you may add beneficiary information to your account. Designations will differ based on the account type, as follows:

  • Individual accounts: If beneficiaries are added to individual accounts, the account will be designated as a transfer on death (TOD) account. Assets will transfer directly to the TOD beneficiaries after the accountholder’s death. For individual accounts that do not have named beneficiaries, the assets will default to the individual’s estate.
  • Joint tenant accounts: These accounts have two or more joint owners (for example, a husband and wife) and if one owner passes away, unless otherwise designated, the assets will belong to the surviving joint owner(s) as a JTWROS account. Beneficiaries may also be added to a JTWROS account so that upon all account holders’ deaths, assets will transfer directly to the beneficiary as a TOD account. Joint tenant accounts that do not have rights of survivorship cannot name TOD beneficiaries.

To add or update beneficiaries on your individual or JTWROS account, complete the Designation of Transfer on Death (TOD) Beneficiary form (PDF). Note that all account owners must sign the form.

Adding a beneficiary designation — retirement accounts:

Designating beneficiaries on IRAs not only helps ensure that assets transfer more easily after death but may also provide beneficiaries the flexibility to keep the assets in a tax-advantaged beneficiary IRA instead of being distributed to the estate.

To add or update beneficiaries on your Roth or traditional IRA, complete the IRA Designation of Beneficiary form (PDF).

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