Beneficiary Designation

What this video covers

• Why a beneficiary designation form on an Individual Retirement Account (IRA), 401(k), life insurance policy, annuity, transfer on death (TOD) account, or pay on death (POD) account overrides the client's will or trust
• The difference between a primary beneficiary and a contingent (secondary) beneficiary, and when each receives assets
• How per stirpes distributes assets by branch of the family tree, and why a deceased beneficiary's share flows down to their children
• How per capita distributes assets by head count among living beneficiaries, and why grandchildren receive nothing under this method
• What happens to a deceased beneficiary's share under per stirpes when that beneficiary left no descendants: the branch closes and the share redistributes to surviving branches
• Why per capita is generally the default when no election is made, and why some employer plans may not support per stirpes designations
• The investment adviser representative (IAR) duty to review beneficiary designations regularly, especially after marriage, divorce, birth, or death