Naming beneficiary other than spouse

Submitted by Kevin Dempsey on Thu, 2017-10-12 13:07

Is there any way to find out the state by state rules for naming someone other than and spouse beneficiary on an IRA? Married client lives in NY and wants to name Mother as 100% primary beneficiary on her IRA. Also, client has 401k with Mother named as Primary beneficiary because she never changed it after getting married. If she dies is husband the actual beneficiary because she’s married?



Submitted by Alan - IRA critic on Thu, 2017-10-12 16:49

  • I am not aware of a consolidated chart outlining the rules in each state that are not affected by federal rules. Generally, the spouse is required to be the beneficiary for married 401k participants except when the spouse waives that interest in writing. As usual, there are a few exceptions and twists to this rule. One of those is that a plan can elect not to have the spouse the beneficiary up to 1 year after the marriage date. 
  • For IRAs, the owner can name anyone they wish as beneficiary. However, in community property states the IRA may be partly or entirely community property meaning that the spouse has a 50% interest in the IRA, so most custodians will also require a waiver in CP states. NY is a common law state, so can name mother if they wish. This means that if client passes the IRA will pass to the mother, but the 401k beneficiary will be the surviving spouse.

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