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Participant Corner: Beneficiary Designations – Who Will Get Your Money?

June 2022

Although not a pleasant topic, it is an important one – Who is the named beneficiary of your retirement account should you pass away?

When you enrolled in your retirement plan, you were asked to select a beneficiary to receive your retirement plan assets in the event of your death. This step may be more important than you think, and it is imperative that you keep this information up to date.

Single

If you are single, your assets go to the designated beneficiary, no matter what your will states. This also includes other agreements and court orders. If you fail to designate a beneficiary, the terms of the plan document govern the disposition of your account. Some plan documents provide that in the absence of a beneficiary designation your estate is the beneficiary, while others use a hierarchy or relatives who are the beneficiaries. Because of the variances in plan documents, it is important that a financial professional review the terms of your plan document when faced with determining who the beneficiary is if no beneficiary is designated.

Married

If you are married, your spouse automatically becomes the beneficiary of your retirement plan. Should you want to name an alternate, you and your spouse may have to sign a waiver in front of a notary.

Separation/Divorce

If you divorce and do not change the beneficiary on file, your ex-spouse will remain the beneficiary of your retirement plan account. This means that if you pass away, he or she will receive your money. This holds true regardless of the existence of children and regardless of the existence of a will which states otherwise. A common occurrence following a divorce is when you designate children as beneficiaries. If you remarry and pass away while married to your second spouse, the second spouse is automatically your beneficiary unless your new spouse consents to your children being designated as beneficiaries.

Death may not be prominent on your mind, but it is inevitable. It is important to be prepared and organized to make sure your wishes are fulfilled.

This material is not intended to provide, and should not be relied on for tax or legal advice. Any information contained herein is of a general nature. You should seek specific advice from your tax or legal professional before pursuing any idea contemplated.

Lebel & Harriman Retirement Advisor is a separate entity from Retirement Plan Advisory Group (RPAG). Retirement Plan Advisory Group (RPAG) is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.

Lebel & Harriman, LLP and Lebel & Harriman Retirement Advisors are separate entities from Retirement Plan Advisory Group (RPAG). Retirement Plan Advisory Group (RPAG) is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.

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