Naming Beneficiaries

Today’s topic is about why you should name beneficiaries to your retirement and investment accounts. For retirement accounts like an IRA, 403(b), or 401(k), if you die without a named beneficiary, your assets will likely be held in probate, which is a legal process where the court has to sort out your estate’s financial situation and determine how to distribute your assets. Naming beneficiaries helps ensure your money will go to whoever you want it to go to. This is a simple move that can save your loved ones time and money. You should review your beneficiaries whenever your situation changes, such as getting married, divorced or becoming a parent.

If you have non-retirement investment accounts, such as a brokerage account, you can also add what is known as a ‘Transfer on Death Agreement” “TOD”, which allows the account's assets to pass directly to the intended beneficiary. The broker/dealer or investment company where the assets are held should be able to provide you with this service.

You should also consider naming a contingent beneficiary, who would serve as a backup in the event that something was to happen to the primary beneficiary and they were not around.

Remember that you can name as many people as you want for both primary and contingent beneficiaries and you can decide the percentage of the benefit that each person would be entitled to.

Please note that many 403(b) and 401(k) providers will require your spouse to acknowledge and waive their beneficiary privileges if they are not named as 100% primary.

- written by Borana Verardi

None of this information should be considered legal advice. You should consult your legal professional for information concerning your individual situation. Legal services are not offered through, or supervised by, The Lincoln Investment Companies.