DEFINITION of 'Designated Beneficiary'
The person who determines how long the retirement plan will survive as a tax-deferred vehicle under the laws governing certain retirement plans. The designated beneficiary must be a person, or in certain situations, a trust for designated individuals.
BREAKING DOWN 'Designated Beneficiary'
Since 2002, the laws governing the distribution of qualified retirement plan assets have become extremely complex. A designated beneficiary must be a person, not an estate and not a charity, although there are also other less tax-efficient ways of making distributions to entities.