Designated Beneficiary

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.

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RELATED FAQS
  1. If I pass away, will my retirement plan go to my spouse tax free?

    If your spouse is the designated beneficiary of your retirement plan, the assets will pass to him or her tax free. The general ... Read Answer >>
  2. My uncle died recently. He designated my mother and father as his beneficiaries in ...

    It depends. If the retirement plan is a qualified plan, then the plan administrator would refer to the plan document to determine ... Read Answer >>
  3. How do I change my contingent beneficiary?

    Learn what life insurance companies and retirement plan accounts require from you to change your contingent beneficiary designations. Read Answer >>
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    Understand the difference between primary and contingent beneficiaries and what happens to assets when neither are present ... Read Answer >>
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    It depends on the provision of the IRA plan document. Some (though very few) do not allow the designation of successor beneficiaries. ... Read Answer >>
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