A Beneficiary Designation Form is a legal document used to name the individuals, trusts, charities, or entities that will receive the assets of a specific account or policy upon the account holder's death. These designations operate outside of the probate process and typically override any contrary provisions in a will or trust, making them one of the most powerful estate planning instruments available. The legal authority for beneficiary designations varies by asset type: life insurance proceeds are governed by state insurance codes, retirement accounts by the Employee Retirement Income Security Act (ERISA, 29 U.S.C. Sections 1001-1461), and bank accounts by state banking and Uniform Probate Code provisions.

The Supreme Court decision in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 555 U.S. 285 (2009), confirmed that ERISA plan beneficiary designations take precedence over state domestic relations law, including divorce decrees. This means that a former spouse who remains named on a beneficiary designation form will receive the retirement account proceeds even if a divorce decree awards the account to the employee. This ruling underscores the critical importance of keeping beneficiary designations current.

Beneficiary designations apply to a wide range of assets including life insurance policies, 401(k) and 403(b) plans, Individual Retirement Accounts (IRAs), pension plans, annuities, payable-on-death (POD) bank accounts, and transfer-on-death (TOD) investment accounts. Under the SECURE Act of 2019, the rules governing inherited retirement accounts changed significantly, requiring most non-spouse beneficiaries to withdraw the entire account within ten years of the account holder's death, eliminating the previous "stretch IRA" strategy.

An employee is enrolling in a new employer's 401(k) plan, group life insurance, or pension plan and must designate beneficiaries as part of the enrollment process. An individual is opening a new IRA, annuity, or life insurance policy and needs to formally name who will receive the proceeds upon their death.

A person has experienced a major life event such as marriage, divorce, the birth of a child, or the death of a previously named beneficiary and needs to update their designations to reflect current wishes. A retiree is reviewing their estate plan and discovers that beneficiary designations on retirement accounts or insurance policies are outdated or conflict with their will or trust.

A business owner is establishing key person life insurance or buy-sell agreement funding and needs to designate the business or co-owner as the policy beneficiary. A person is setting up a payable-on-death (POD) designation on bank accounts or a transfer-on-death (TOD) registration on brokerage accounts to enable assets to pass directly to beneficiaries without probate.

An estate planning attorney is coordinating a client's overall estate plan and needs to ensure that all beneficiary designations are aligned with the client's will, revocable trust, and overall distribution objectives.

The account holder's identifying information must include their full legal name, date of birth, Social Security number, and the account or policy number for which the designation applies. The form must specify the type of account (life insurance, 401(k), IRA, annuity, bank POD, brokerage TOD).

Primary beneficiary designations must include each beneficiary's full legal name, date of birth, Social Security number or tax identification number, relationship to the account holder, and the percentage or share of the account each beneficiary is to receive. The percentages must total exactly 100%. For trusts as beneficiaries, the trust name, date of trust, and trustee name must be provided.

Contingent (secondary) beneficiary designations serve as backup recipients if the primary beneficiary predeceases the account holder or disclaims the benefit. The same identifying information required for primary beneficiaries must be provided for contingent beneficiaries.

Per stirpes versus per capita distribution elections determine what happens if a beneficiary dies before the account holder. Per stirpes means the deceased beneficiary's share passes to their descendants; per capita distributes the share equally among the surviving beneficiaries. This election has significant implications and should align with the account holder's overall estate plan.

For ERISA-governed retirement plans, spousal consent provisions apply. Under ERISA Section 205 and IRC Section 401(a)(11), a married participant's spouse is automatically the beneficiary of the retirement account, and designating a non-spouse beneficiary requires the spouse's written, notarized consent. This requirement applies to 401(k) plans, pension plans, and other qualified plans, but not to IRAs.

The form must include the account holder's signature and date, and if required, the spouse's consent signature with notarization. The form should include clear instructions for submission to the plan administrator, insurance company, or financial institution. A copy should be retained for the account holder's records.