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.