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Personal finance

Nonretirement accounts

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

Adding beneficiaries to nonretirement accounts

Nonretirement beneficiaries are facilitated through the Vanguard Transfer on Death (TOD) plan. The TOD plan can affect tax strategies and estate planning, so we strongly encourage all Vanguard clients to consult with a legal advisor before enrolling in the plan. It is not a substitute for a comprehensive estate plan.

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.

Will

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

Trust

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.
The TOD plan may be appropriate for you if… The TOD plan may NOT be appropriate for you if…
You have an uncomplicated financial and personal situation. You have a complicated financial and personal situation.
You have not created, nor plan to create, a comprehensive estate plan. You have already created and signed a will, trust or other legal document with instructions for your nonretirement accounts.
You do not want special instructions imposed that dictate how beneficiaries receive or use the assets. You want special instructions for the beneficiaries, such as terms or conditions on how the assets are received or used.
You have talked with an estate planning attorney and agreed that the TOD plan is right for you. You want to avoid or reduce the impact of estate taxes.

Who can I add as a nonretirement beneficiary

We offer three options for beneficiaries for nonretirement accounts. They’re listed below with some important information relating to each option.

Individuals

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

Trust

  • The trust must already exist 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.
     

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