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How to Name Contingent Beneficiaries of a 401(k)

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Beneficiaries are people, trusts or organizations that will receive your benefits in the event of your death. You must name at least one primary beneficiary to whom the benefits would first be paid. In the event that your primary beneficiary cannot receive the benefits, the payment would then go to your contingent beneficiary.

The procedure for naming contingent beneficiaries for your 401(k) is generally the same regardless of the investment company you use; however, always follow your investment company’s specific rules and procedures.

 

Things You’ll Need

  • Beneficiary designation form
  • Application
  • Paper
  • Copy of will
  • Copy of form

 

Beneficiaries of a 401(k)

 

Request a new beneficiary designation form from your investment company if you have an existing 401(k) and wish to change the beneficiaries or add new ones. If you are setting up your 401(k) for the first time, locate the section of the application for beneficiary designations.

Write down the full name of one beneficiary on each line designated for contingent beneficiaries. You may name as many beneficiaries and contingent beneficiaries as you like, or you may name only one of each if you prefer. If you run out of lines for contingent beneficiaries, type your list on a separate piece of paper, sign, date it and attach it to the form. Some investment companies may prefer that you use additional beneficiary designation forms instead.

Write “Pay to the estate of” if you wish to name an estate as a contingent beneficiary. If you choose this option, depending on your investment company, you may also need to include a copy of your will.

Provide the full name of the appointed guardian of a minor contingent beneficiary, if applicable. Ask your investment company if they have any other requirements for this type of designation.

Indicate a percentage for each contingent beneficiary if you list more than one. If you wish to split your account evenly between two contingent beneficiaries, should your primary beneficiaries be unavailable, list 50 percent for each of them. Do not use partial percentage points, such as 50.5 percent. Ensure that the sum total of all percentages is exactly 100 percent.

Make a copy of the completed form for your records, and mail the original to your investment company.

 

Tips & Warnings

You cannot list a person or charity as both a primary and a contingent beneficiary.

 

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