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Nonretirement accounts

Even do-it-yourself investors would benefit from professional help when it comes to estate planning.

Your nonretirement account beneficiaries

Most nonretirement accounts don't have beneficiaries and, depending on your estate plan, may not need them. The table below summarizes 3 options for adding beneficiaries to you nonretirement accounts. Each option offers advantages and disadvantages, so consult an estate-planning attorney to determine what's best for you.

A summary of your options for designating beneficiaries



  • Identify the parties entitled to your assets.
  • Specify how and when your assets will be distributed.
  • Allow for the most tax-efficient way to divide your assets.
  • Your assets may be subject to creditors.
  • Your assets will have to go through probate.



  • Specify who gets your assets and how they'll be distributed.
  • Provide better tax planning for large estates.
  • Arrange care for disabled beneficiaries.
  • Avoid probate.
  • Can be expensive, typically more than to prepare a will.


Transfer on death plan

  • Name individuals, trusts, or organizations as your beneficiaries.
  • Avoid probate.
  • Your assets may be subject to creditors.
  • Doesn't allow for more complex estate-planning techniques.
  • Can override a will, trust, or other estate plans you've made.

Vanguard Transfer on Death Plan FAQs

The questions below may help you determine whether to add beneficiaries to your nonretirement accounts using the Vanguard Transfer on Death (TOD) Plan.

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Is the Vanguard TOD Plan right for my accounts?

The TOD Plan isn't a substitute for a comprehensive estate plan and works best when your instructions are simple and direct. It may not be right for you if you own community property assets.

If you want to impose restrictions on how your beneficiaries will receive and use your assets or want to use more sophisticated estate-planning techniques, you may need a more flexible solution. You may want to obtain legal advice.

Who can be a beneficiary of a nonretirement account?

The following can be added as beneficiaries to your nonretirement accounts with the TOD Plan:


  • Name one or more individuals (you’ll need dates of birth).
  • Allocate assets as you wish.


  • The trust must already exist or and must be a trust under agreement.
  • No documentation is needed to name the trust as the beneficiary, but it is required for payout. You will need the trust creation date.

Charities and other organizations

  • Name one or more charities or other organizations.
  • Consult with an estate-planning attorney.

Why can't you add beneficiaries to a joint account?

You can't add beneficiaries to a joint account because the other joint owner is automatically the surviving beneficiary. State laws often dictate the process for when both joint owners pass at the same time.

What account types aren't eligible for the Vanguard TOD plan?

You can't add TOD beneficiaries to joint accounts (see above), UGMA/UTMAs, trusts, estate accounts, IRAs and other retirement plans (IRAs have a separate provision for beneficiaries and don't use the TOD plan), bankruptcy accounts, organization accounts, and custodial/guardian/conservator accounts (unless directed by the court).

How do beneficiaries and backup beneficiaries work?

All beneficiaries have to be deceased before a backup beneficiary receives assets. For example, if John and Jane Doe are listed as beneficiaries, and John passes away, Jane will get 100% of the assets (with no money going to the backup beneficiaries).

What happens when I die?

The people (or organization/charity) will need to contact Vanguard and alert us to your passing. We’ll ask for a death certificate and some other information/paperwork. Once we have everything on file, we’ll transfer the assets to any beneficiaries listed on the account. You can learn more about the inheritance process here.

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Estate plan

A plan to carry out an individual's wishes as to the administration and disposition of his or her property before or after his or her death.

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A legal document in which a person leaves instructions for how to distribute his or her property after death.

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A legal arrangement through which a third party holds property, such as investments or real estate, on behalf of a beneficiary. Trusts are often used to reduce or eliminate estate taxes.

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Joint accounts

An account with two or more owners.

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Community property

The nine community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska has an elective community property system.

If you ever lived in a community property state while you were married, your spouse at that time may have certain rights to your account. Consider consulting an estate-planning attorney for guidance on community property rights. Vanguard won't assume responsibility for determining whether your account is subject to community property.

These nine states operate under some form of a community property ownership system. State laws vary, but community property generally holds that assets acquired by either spouse during the marriage (other than through gift or inheritance), while domiciled in a community property state, are the community property of both spouses, with each spouse entitled to half of the assets. The deceased spouse's share may pass according to the terms of his or her will and wouldn't be covered by the Vanguard TOD Plan.