To name a beneficiary, you fill out a designation form with the institution that holds the account — your bank, brokerage, retirement plan administrator, or insurance carrier — identifying the person or entity who should receive the asset when you die, and assigning each named beneficiary a percentage share. The form is a contract between you and the institution, and it generally overrides whatever your will or trust says about that account. The mechanics are simple; the choices behind them carry real legal and tax weight, and that is where most people need guidance.
Information the Form Will Ask For
Every designation form asks for enough detail to let the institution verify the right person later. Be ready to provide:
- Full legal name as it appears on government-issued identification, not a nickname.
- Date of birth, which helps distinguish beneficiaries with similar names.
- Mailing address.
- Relationship to you — spouse, child, sibling, friend, and so on.
- Social Security number. Most institutions do not require it at the time of designation, but the beneficiary will have to provide it when filing a claim.
The SSN point matters because many people stall on the form thinking they need a number they do not have. In most cases you can complete the designation now and the beneficiary supplies the SSN when they claim the asset.
Primary, Contingent, and Multiple Beneficiaries
Designations are tiered. A primary beneficiary is first in line. A contingent beneficiary is the backup, receiving the asset only if every primary beneficiary has already died. Naming at least one contingent beneficiary is the simplest way to keep the asset out of probate if your first choice does not survive you.
When you name more than one person at the same tier, you assign each a percentage, and the shares must add up to exactly 100 percent.1U.S. Office of Personnel Management. Designation of Beneficiary You might split a life insurance policy roughly evenly among three siblings at about 33.33 percent each, or give 50 percent to your spouse and 25 percent to each of two children. If the shares are blank or do not total 100 percent, the institution may reject the form or divide the asset equally by default.
Per Stirpes vs. Per Capita
Most forms ask you to pick a distribution method that governs what happens if a beneficiary dies before you. The choice matters most when you name multiple people across generations.
Per stirpes (Latin for “by the branch”) sends a deceased beneficiary’s share down to that person’s own descendants. If you name three children equally and one dies before you, that child’s one-third would go to their children — your grandchildren — rather than being redistributed to your two surviving children.
Per capita (Latin for “by the head”) typically splits the asset only among surviving beneficiaries. In the same scenario, the two surviving children would each receive half, and the deceased child’s children would receive nothing. Per capita is the common default when a form does not specify a method.
Definitions vary across institutions and states, so read the specific language on your form rather than relying on a general description.
Where You File the Designation
The process differs by account type.
For checking and savings accounts, CDs, and brokerage accounts, you add a Payable on Death (POD) instruction at a bank or credit union, or a Transfer on Death (TOD) instruction at a brokerage. Both route the asset directly to your named beneficiary without probate. Most banks and brokerages let you set these up through online account settings under a “beneficiaries” or profile section; some still require you to sign a paper form in person.
For 401(k)s, 403(b)s, and other employer-sponsored retirement plans, you file the designation through your employer’s benefits portal or directly with the plan administrator. For individual IRAs and life insurance policies, you work with the institution or carrier that issued the account. The important distinction is legal, not procedural: employer-sponsored plans are governed by federal law, which creates spousal protections that override your personal choices in certain situations.
Spousal Consent on Retirement Plans
If you are married and want to name anyone other than your spouse as the primary beneficiary of an employer-sponsored retirement plan, federal law requires your spouse to sign a written waiver. Under 29 U.S.C. § 1055, pension plans and many 401(k) plans must pay benefits to a surviving spouse unless the spouse formally consents to a different arrangement.2Office of the Law Revision Counsel. 29 USC 1055 – Requirement of Joint and Survivor Annuity and Preretirement Survivor Annuity
The waiver has to meet specific requirements to be valid. The spouse’s consent must be in writing, must name the alternate beneficiary (or expressly allow you to choose without further consent), and must be witnessed by a plan representative or a notary public.2Office of the Law Revision Counsel. 29 USC 1055 – Requirement of Joint and Survivor Annuity and Preretirement Survivor Annuity Without one, the plan administrator must pay the surviving spouse regardless of what your designation says.
Community property states layer on their own rules. In those states, your spouse may hold a legal ownership interest in assets acquired during the marriage, and that interest can require their consent before you name a non-spouse beneficiary on accounts outside ERISA, including individual life insurance policies and HSAs. If you live in a community property state, confirm with each institution whether spousal consent is needed.
Naming a Minor Child
Financial institutions generally cannot distribute assets directly to someone under 18. Name a minor outright and the institution may hold the funds until the child reaches adulthood, or a court may have to appoint a guardian to manage the money — which pulls the asset into probate and adds cost.
Two workarounds solve this. You can name a custodian under the Uniform Transfers to Minors Act, which most states have adopted. The designation reads something like “Jane Smith as custodian for Alex Smith under the [State] Uniform Transfers to Minors Act.” The custodian manages the funds until the child reaches the age set by state law, usually 18 or 21. Alternatively, you can set up a trust for the child and name the trust as beneficiary, which gives you more control over when and how distributions are released.
Naming Someone With a Disability
Naming a person with a disability directly can disqualify them from needs-based programs like Medicaid and Supplemental Security Income. The SSI resource limit for an individual in 2026 remains $2,000.3Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet Even a modest life insurance payout or retirement account balance received directly can push the beneficiary over that limit and cost them benefits they rely on for food, shelter, and medical care.
The standard fix is to name a special needs trust as the beneficiary instead of the individual. The trust owns the assets, so the beneficiary keeps their eligibility while the trustee uses trust funds to cover supplemental needs. If you plan to leave assets to someone on SSI or Medicaid, work with an attorney who specializes in special needs planning before you fill out the form.
Naming a Trust, Charity, or Your Estate
You are not limited to naming individuals. Each non-individual option has its own identifying requirements.
- Trust: provide the full legal name of the trust and the date it was established. The trust must already exist at the time of the designation. Include the trustee’s name and contact information so the institution can coordinate the transfer.4U.S. Department of Veterans Affairs. Naming Beneficiaries – Life Insurance
- Charity: provide the organization’s full legal name, address, and federal Tax Identification Number so the institution can verify it and report the transfer correctly.
- Your estate: you can name your estate as beneficiary, but doing so sends the asset through probate and defeats the main reason to use a designation in the first place.
Naming a trust as beneficiary of a retirement account carries special tax implications. Not every trust qualifies for the distribution options discussed below. A trust that fails IRS “look-through” requirements may have to distribute the entire account within five years, accelerating the tax burden. Talk to a tax advisor before naming a trust as beneficiary of a retirement account.
Updating Designations After Life Changes
A designation is not a one-time document. Marriage, divorce, the birth of a child, or a beneficiary’s death should trigger an immediate review. Most institutions offer a “Change of Beneficiary” form or an update option inside your account profile. The new designation replaces the old one in full, so complete every field, including contingent beneficiaries. A partial update that names a new primary but leaves outdated contingents in place creates confusion when it matters most.
Divorce Is the High-Risk Moment
Divorce is where outdated designations do the most damage. Many states automatically revoke an ex-spouse’s beneficiary status on non-ERISA assets like individually owned life insurance policies and bank accounts. Those state laws do not reach employer-sponsored retirement plans.
The U.S. Supreme Court has held that ERISA preempts state revocation-on-divorce statutes. In Egelhoff v. Egelhoff, the Court held that the plan administrator must follow the plan documents, meaning if your ex-spouse is still named on your 401(k), they will receive the money regardless of your divorce decree or any state law that says otherwise.5Legal Information Institute. Egelhoff v. Egelhoff, 532 U.S. 141 (2001) The same principle governs federal employee benefits. In Hillman v. Maretta, the Court reaffirmed that federal law gives employees “unfettered freedom of choice” in selecting a beneficiary, and the named beneficiary controls.6Justia Law. Hillman v. Maretta, 569 U.S. 483 (2013)
Do not rely on state law or a divorce decree to remove your ex-spouse from your accounts. Log into every retirement plan, insurance policy, and financial account and file new designations as soon as the divorce is final.
How Your Choice Affects Taxes: The 10-Year Rule
On a retirement account, who you name affects not only who gets the money but how fast they have to withdraw it and how much tax they owe. Under the SECURE Act, most non-spouse beneficiaries who inherit an IRA or 401(k) from someone who died after 2019 must empty the account by the end of the 10th year after the owner’s death.7Internal Revenue Service. Retirement Topics – Beneficiary
A narrow group of “eligible designated beneficiaries” can still stretch distributions over their own life expectancy:
- A surviving spouse, who can roll the account into their own IRA or take lifetime distributions.
- A minor child of the account owner, who can stretch distributions until reaching the age of majority, after which the 10-year clock starts.
- Disabled or chronically ill individuals.
- Any beneficiary not more than 10 years younger than the account owner.
Everyone else — most adult children, siblings, and friends — falls under the 10-year rule.7Internal Revenue Service. Retirement Topics – Beneficiary Under IRS rules that took effect in 2025, if the original account owner had already begun taking required minimum distributions before death, the beneficiary must also take annual distributions during the 10-year window, not just clear the account by the deadline. Withdrawals from traditional pre-tax retirement accounts are taxable income in the year received, so the 10-year window can create a sizable and sometimes unexpected tax bill for whoever you name.
That makes the choice of beneficiary a tax decision as much as an inheritance decision. A spouse or eligible designated beneficiary can draw funds down gradually. A non-eligible beneficiary, or a trust that fails the IRS look-through requirements, concentrates the tax hit.
What Happens If You Name No One
If you die without a valid designation on an account, the institution applies its own default rules. Many retirement plans treat a surviving spouse as the automatic default even without a form on file. If there is no surviving spouse, or the account is a bank or brokerage account with no POD or TOD on it, the asset usually becomes part of your estate.
Once an asset enters your estate it goes through probate, which is exactly what a beneficiary designation is meant to avoid. Probate can take months, involves court and legal fees, and creates a public record of your assets. If you also have no will, state intestacy law decides who inherits, and that outcome may bear no resemblance to what you would have chosen.
The same thing happens if every named beneficiary dies before you and you have no contingents on file. A short review after every major life event is enough to keep that default from taking effect.