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Adding a Beneficiary to Your Account

Adding a Beneficiary to Your Account Menu

Why designate a beneficiary?
Designating a beneficiary on an account can be a simple way to define how you wish for your assets to be transferred after your death.

  • For accounts with beneficiaries, assets can transfer to the intended beneficiary directly and potentially avoid going through the probate process. Avoiding probate could save both time and money for intended beneficiaries.
  • For accounts without beneficiaries, assets generally pass to the decedent’s estate or to default beneficiaries for certain retirement accounts.

Account owners should review their beneficiary information regularly or work with their estate planner or advisor to ensure that their assets are set up to transfer the way they are intended.

Primary and secondary beneficiaries
There are no limits to the number of beneficiaries on an account, and generally, there are two types.

  1. Primary beneficiary: This is an individual or entity that is designated to receive assets upon the account owner’s death. An account owner may designate any number of primary beneficiaries and assign a percentage of the assets to each beneficiary.

    If there are multiple account beneficiaries and any of them predeceases the account owner, those shares will be divided pro rata among the remaining beneficiaries, with the exception of a lineal descendants or lineal descendants per stirpes designation. (See the beneficiary designation charts below for more details.)
  2. Secondary beneficiary: A secondary beneficiary (sometimes called a contingent beneficiary) is an individual or entity that is designated to receive account assets if all primary beneficiaries have predeceased the account owner(s).

There are two main types of beneficiary designations:

Non–lineal descendants designation

If you have multiple beneficiaries on an account and one of them predeceases you, their share of the assets will be split pro rata across your remaining designated beneficiaries. Accounts will default to this designation unless otherwise specified.

Lineal descendants per stirpes designation

If any beneficiary predeceases you, their share of the assets generally passes to his or her heirs and not to the other beneficiaries listed.

The steps needed for an account owner to designate a beneficiary can differ based on the type of account that is held.

Adding a beneficiary designation—nonretirement accounts
If you hold an individual or joint tenancy with rights of survivorship (JTWROS) account, you may add beneficiary information to your account. Designations will differ based on the account type, as follows:

  • Individual accounts. If beneficiaries are added to individual accounts, the account will be designated as a transfer on death (TOD) account. Assets will transfer directly to the TOD beneficiaries after the accountholder’s death. For individual accounts that do not have named beneficiaries, the assets will default to the individual’s estate.
  • Joint tenant accounts. These accounts have two or more joint owners (for example, a husband and wife) and if one owner passes away, unless otherwise designated, the assets will belong to the surviving joint owner(s) as a JTWROS account. Beneficiaries may also be added to a JTWROS account so that upon all accountholders’ deaths, assets will transfer directly to the beneficiary as a TOD account. Joint tenant accounts that do not have rights of survivorship cannot name TOD beneficiaries.

To add or update beneficiaries on your individual or JTWROS account, complete the Designation of Transfer on Death (TOD) Beneficiary form. Note that all account owners must sign the form.  

Adding a beneficiary designation—retirement accounts
Designating beneficiaries on individual retirement accounts (IRAs) not only helps ensure that assets transfer more easily after death but may also provide the beneficiary the flexibility to keep the assets in a tax-advantaged beneficiary IRA instead of being distributed to the estate.

To add or update beneficiaries on your Roth or traditional IRA, complete the IRA Designation of Beneficiary form.

Mail completed forms to:
Wells Fargo Funds
P.O. Box 219967
Kansas City, MO 64121-9967

 

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