Who’s Your Beneficiary?

When you joined your employer’s retirement plan, you probably named a beneficiary for your plan account and quickly forgot about it. You should take time to review your retirement account beneficiary designation every so often. You may find that you want (or need) to change it.

The Basics
The person you name as the beneficiary of your retirement plan account will receive the money in your account if you die. Even if you have a will and have designated someone to inherit all of your assets, it generally won’t affect your retirement account. Instead, that money will typically automatically pass to the person you have designated as your account beneficiary.

Your Spouse
If you’re married, many retirement plans require that you name your spouse as the primary beneficiary. In that case, it’s possible to name someone else, but only if your spouse signs a consent waiving his or her rights to your plan assets.

Your Kids
If you’re a single parent, you may want your plan assets to go to your minor children. However, most retirement plans will not transfer money directly to minors. Instead, a court will appoint a trustee or guardian to receive the money on your children’s behalf. This legal process can take time. Meanwhile, the money won’t be available for your children’s support. One way to avoid delays is to name a trust for the benefit of your children as the beneficiary of your account. If you decide to go that route, be sure to talk to your legal advisor.

Your Parents
If you’re unmarried and don’t have any children, you may decide to name your parents as your beneficiaries. If you get married later on, you can change your beneficiary designation.

Checking your beneficiary designation will help ensure that your retirement account assets will be passed on as you wish. Make sure you review your retirement plan account’s beneficiary designation if any of the following events occur:

• You get married.
• You add a child to your family.
• You get divorced.
• Your primary beneficiary dies.