Adding a Beneficiary

Updated by Richard Phillips, EA, AIFA, CPC, CPFA, QPA, QKA

You will have the option of adding a beneficiary to your 401(k) account either when you enroll in your company's plan or any time after. A beneficiary is someone you have selected to inherit your 401(k) distributions should you pass away. While you are not required to add a beneficiary to your account, it is a simple way to make sure that your money goes to a person that you choose as efficiently as possible.

To add a beneficiary, simply:

  • Log in to your online account
  • Locate 'Account Settings' on the top menu
  • Select 'Beneficiaries' from the drop down menu.

For more information about beneficiaries, keep reading below.

Primary Beneficiary

Married Participants

Your primary beneficiary is your first choice to receive your benefits. Spouses may have special rights and considerations under federal and state law. By default, your spouse is presumed to be your primary beneficiary. If you wish to name someone else as your primary beneficiary, your spouse will need to give written consent on a beneficiary form. It is a good practice to review and update your beneficiaries every two or three years as financial and personal circumstances change.

Single Participants

You can name anyone you would like as your primary beneficiary. However, please keep in mind, if you were to get married at a later date, your spouse would be considered your default primary beneficiary, and take precedent over the person you have listed. To keep your original beneficiary, your spouse would need to give written consent on a beneficiary form.

Contingent Beneficiary

In the event that your primary beneficiary does not survive you, the assets in your account can pass to the next person in line that you have named. A Contingent beneficiary guarantees that someone of your choosing will always receive a distribution according to your instructions, as long as you keep your selections updated.

Multiple Beneficiaries

The proceeds may also be split among several persons. Simply list the primary and contingent beneficiaries of your choosing and allocate the percentage that each one should receive. The percentages do not have to be equal to each other, but they must add up to 100%.

No Beneficiary

If you do not name a beneficiary, or if no named beneficiary survives you, your assets may become part of your probate estate. Probate is a court process that determines the timing and manner in which your assets transfer to the appropriate heirs or beneficiaries. If assets are distributed to your estate through probate, it may result in more limited options for taxation and additional attorney or executor fees.

Minor Beneficiary

If a beneficiary inherits your 401(k) account prior to age 18, a court will have to appoint a guardian to oversee use of the funds. Many people wish to avoid surrogate court involvement. In this case, it may be better to name a spouse or another trusted guardian who would use the funds for the benefit of the minor. This may serve as a temporary solution until the minor beneficiary you wish to name comes of age. Remember you can always update your beneficiaries after making your initial selection.

Living Trust

Assets may also be moved into a Living Trust named as your beneficiary. With the help of an attorney, you can establish a trust designed to benefit a designated person or persons as well as name the trustee that you would like to manage the trust. This is another possible solution to leaving your 401(k) to minor children without having to be subject to court proceedings.

Non-Individual Beneficiary


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