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Retirement

Adding beneficiaries to your IRAs

IRAs offer a few options not available for other types of accounts.
6 minute read

Who can be an IRA beneficiary?

The short answer: Anyone can be a beneficiary on your IRA, including minor children. And your beneficiaries don't need to be family members.

It's important that the beneficiaries listed on your Vanguard accounts match your beneficiaries' legal names when they inherit the accounts, so don't use nicknames.
 

Your spouse

Your spouse can be your beneficiary on any type of account. If you have an IRA, you may designate the person you're married to as your beneficiary by name or you can designate by relationship by selecting “the person I am married to at the time of my death.”
 

Your children or grandchildren

Likewise, you can name each of your children or grandchildren individually as beneficiaries. If you have more than one child or grandchild, you could allocate your beneficiaries among them as you see fit. If you have 2 children, for example, you could divide the money 60%-40% or you could also split your assets equally 50%-50%.
 

Trusts

If you've already created a trust, you may name it as a beneficiary, which can also help to avoid probate. And if your children are young or have special needs, a trust can make sure they're properly cared for.

Trusts can help ensure that your estate is managed if you become incapacitated, but trusts can be expensive and usually require legal expertise to establish. Check with an estate-planning attorney for more information about how to create a trust.
 

Charities & other organizations

You may name charities or other organizations as beneficiaries and divide the allocations among them in whatever percentages you'd like. Contact the charity you wish to name and ask whether it has any instructions for naming it as a beneficiary.

If you name organizations as beneficiaries, arrange for someone to notify them of your death. We don't contact beneficiaries after the deaths of Vanguard account owners.

If you're interested in naming a charity as your beneficiary, consider Vanguard Charitable—a donor-advised fund that offers a tax-effective way to grant assets to charity. 

Learn more about Vanguard Charitable 

Using relationships, not names

Your IRA beneficiaries' names may change over time. Some marriages end, and some spouses remarry after being divorced or widowed. If account owners forget to check the names of their beneficiaries, the names may no longer reflect their intentions.

For example, Ellen names her husband John as the beneficiary of her IRA. They divorce, and a few years later, Ellen marries Tom. To make Tom the beneficiary of her IRA, Ellen would have to remember that she'd originally named John as her beneficiary and make the change herself.

To avoid similar situations, consider designating your beneficiaries by their relationships to you. For example, you can leave your IRA "to the person I am married to at the time of my death."

Vanguard Charitable was founded by Vanguard in 1997 as an independent 501(c)(3) organization to help investors grow their assets for philanthropic giving. Although Vanguard provides certain investment management and administrative services to Vanguard Charitable pursuant to a service agreement, Vanguard Charitable is not a program or activity of Vanguard.

Beneficiary

A person or organization designated to receive the proceeds of an investment account (or an insurance policy, a pension, or an annuity contract) after the owner's death.

IRA (individual retirement account)

A type of account created by the IRS that offers tax benefits when you use it to save for retirement.

Trust

A legal arrangement through which property, such as investments or real estate, is held by a trustee on behalf of a beneficiary. Trusts are often used as part of a plan to minimize or eliminate estate taxes.

Probate

A court procedure that validates a will and settles the decedent's estate. During probate, the estate's executor or administrator collects the estate's assets, pays liabilities and necessary taxes, and distributes property to heirs.

Per stirpes

Rather than name beneficiaries, the account owner can use the "per stirpes" designation to divide assets equally among his or her children (but not stepchildren). All children who survive the account owner will share the assets equally.

Your Descendants

If you’d like to leave your assets to all of your children you can select the “My descendants” option rather than listing each of your children individually. This designation would divide your assets equally among all your children who survive you (not including stepchildren).

If any of your children die before you, that child's children—your grandchildren—would equally share their deceased parent's share of your assets. If they didn’t have any children, their share would be divided among your surviving children. This is known as per stirpes.

We offer this relationship-based designation to allow for new family members to be included (for example, a new child or grandchild) without the need to update your beneficiary selections.

BEST PRACTICE

After you've added beneficiaries to your IRAs, consider reviewing them every year, especially after births and deaths, weddings and divorces.

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Are you inheriting a Vanguard account?

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Vanguard understands your legacy

Designate beneficiaries

Log in

Are you inheriting a Vanguard account?

See how to transfer it into your name

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