Beneficiaries Answers

Can my child be my 401(k) beneficiary?

Yes, unless you're married. If you're married your spouse is automatically your beneficiary - no matter who is actually named on the account. To change that designation, your spouse must waive the right to the account in a notarized statement. A place for your spouse's signature is typically provided on the beneficiary form.

If your beneficiary is a minor, be sure to consult a lawyer about naming a custodian in your will or establishing a revocable living trust. If you don't decide who should manage your child's inheritance until he or she is an adult, the state may do it for you.

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How do I change my beneficiary?

Simply complete and submit a new beneficiary form. You can obtain a copy of your company's beneficiary form (they vary by plan) by calling our customer service line, assuming we handle your company's plan. Experts say it's a good idea to review your beneficiary designation once a year.

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What happens if I am the beneficiary of someone's 401(k)?

Unfortunately, taxes can take a hefty chunk out of the amount you inherit. The entire amount will probably be subject to income tax and estate taxes. Rollovers are not flexible either. As a beneficiary, you generally aren't allowed to keep the 401(k) money in the employer's plan and you also can't roll over the money to your own 401(k). However, if you are the spouse of the deceased, you can roll the 401(k) into an IRA.

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