Add Account Holders and Beneficiaries
Complete Guide to Beneficiary Designation
Designating beneficiaries for your accounts is one of the most important steps in estate planning. This comprehensive guide will help you complete your beneficiary designation form correctly and answer common questions about the process.
Quick Tip: You can update your beneficiaries online through your secure banking portal or by submitting the beneficiary designation form.
Before You Begin
Legal Notice: Beneficiary designations supersede instructions in your will for these accounts. We recommend consulting with your estate planning attorney to ensure your beneficiary designations align with your overall estate plan.
Required Information
Have the following information ready for each beneficiary before starting:
- Full legal name (as it appears on government-issued ID)
- Date of birth
- Social Security Number (SSN) or Tax Identification Number (TIN)
- Complete mailing address
- Relationship to you
- Phone number (optional but recommended)
Step-by-Step Instructions
Section 1: Account Information
1 Account Number: Enter your complete account number. This can be found on your monthly statement or in your online banking portal under "Account Details."
2 Account Type: Select the appropriate account type from the dropdown menu. Common types include:
- Traditional IRA
- Roth IRA
- 401(k) or 403(b)
- Investment Account
- Trust Account
- Life Insurance Policy
Section 2: Account Owner Information
3 Your Information: Verify that your name, SSN, and date of birth match our records exactly. Any discrepancies may delay processing.
Section 3: Beneficiary Designations
Understanding Beneficiary Types:
- Primary Beneficiaries: First in line to receive assets upon your passing
- Contingent Beneficiaries: Receive assets only if no primary beneficiaries survive you
Adding Primary Beneficiaries
4 Enter Beneficiary Details: For each primary beneficiary, provide:
- Full legal name (no nicknames)
- Relationship (spouse, child, parent, sibling, trust, charity, other)
- SSN or Tax ID
- Date of birth
- Complete address
- Percentage of assets they should receive
Important: Primary beneficiary percentages must total exactly 100%. The same rule applies to contingent beneficiaries if you choose to name them.
Adding Contingent Beneficiaries (Optional)
5 Contingent Beneficiaries: Click "Add Contingent Beneficiary" and enter the same information as for primary beneficiaries. These individuals will only receive assets if all primary beneficiaries are deceased.
Section 4: Additional Options
6 Per Stirpes Election: Check this box if you want a deceased beneficiary's share to pass to their descendants rather than being divided among surviving beneficiaries.
7 Restricted Access for Minors: If naming minor beneficiaries, consider checking this option to hold funds in trust until they reach the age of majority (typically 18 or 21, depending on your state).
Common Scenarios and Examples
| Scenario | Primary Beneficiaries | Contingent Beneficiaries |
|---|---|---|
| Married with children | Spouse (100%) | Children (equal shares) |
| Single with siblings | Siblings (equal shares) | Charity or estate |
| Blended family | Spouse (50%), Children (50% divided) | Trust or specific individuals |
| Charitable giving | Family (75%), Charity (25%) | Alternative charity or estate |
Frequently Asked Questions
Can I name a minor child as a beneficiary?
Yes, you can name a minor as a beneficiary. However, if they're under 18 (or 21 in some states) when they inherit, the assets will typically be held in a custodial account until they reach the age of majority. Consider establishing a trust or naming a trusted adult as custodian to manage the funds.
What happens if I don't name any beneficiaries?
If you don't designate beneficiaries, your assets will typically go to your estate and be distributed according to your will. If you don't have a will, state intestacy laws will determine distribution. This process can be time-consuming and costly, which is why naming beneficiaries is recommended.
Can I name my estate as a beneficiary?
Yes, but this is generally not recommended for tax-advantaged accounts like IRAs, as it may accelerate income tax obligations and eliminate stretch distribution options. Consult with a tax advisor before naming your estate as beneficiary.
How do I split assets between multiple beneficiaries?
Specify the percentage each beneficiary should receive. For example, if you have three children and want them to share equally, assign 33.33%, 33.33%, and 33.34% (totaling 100%). You can also specify dollar amounts for some beneficiaries and percentages for others.
What if my beneficiary doesn't have a Social Security Number?
For non-U.S. citizens or residents without an SSN, you can use their foreign tax identification number. For organizations or charities, use their Employer Identification Number (EIN). Contact our support team if you need assistance with international beneficiaries.
Can I change my beneficiaries after submitting the form?
Yes, you can update your beneficiaries at any time by submitting a new form. The most recent form on file will supersede all previous designations. We recommend reviewing your beneficiaries annually and after major life events.
What is the difference between "per stirpes" and "per capita"?
Per stirpes means if a beneficiary dies before you, their share passes to their descendants. Per capita means the deceased beneficiary's share is divided among the surviving beneficiaries. For example, if you name your three children as equal beneficiaries:
- Per stirpes: If one child predeceases you, their 33.33% goes to their children (your grandchildren)
- Per capita: If one child predeceases you, the surviving two children each receive 50%
Should I name the same beneficiaries for all my accounts?
Not necessarily. You may want different beneficiaries for different accounts based on tax implications, account types, and your overall estate plan. For example, you might leave your Roth IRA to younger beneficiaries who can maximize tax-free growth, while leaving taxable accounts to your spouse.
Important Considerations
Tax Implications
- Spouses have special privileges for inheriting retirement accounts
- Non-spouse beneficiaries must follow specific distribution rules
- Charitable beneficiaries can provide estate tax benefits
- Consult a tax professional for personalized advice
Life Events That Require Updates
- Marriage or divorce
- Birth or adoption of children
- Death of a beneficiary
- Significant changes in financial situation
- Changes in tax laws
Submitting Your Form
8 Review All Information: Double-check all entries for accuracy, especially SSNs and percentages.
9 Sign and Date: Your electronic signature (typing your full legal name) serves as your official signature.
10 Submit: Click "Submit Designation" to send your form for processing.
What Happens Next:
- You'll receive an email confirmation immediately
- Processing typically takes 3-5 business days
- You'll receive a final confirmation once updates are complete
- A copy will be available in your document center
Need Additional Help?
Our wealth management specialists are available to assist you with beneficiary designations and estate planning questions.