Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Vanguard and deceased beneficiaries for IRA
Old 09-25-2022, 04:34 PM   #1
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 938
Vanguard and deceased beneficiaries for IRA

Does anyone know definitively how Vanguard handles traditional IRA beneficiaries if one of the beneficiaries died before the IRA account owner?

Let's say you have an account and name your 2 children.

One child dies and you do not change your beneficiaries.

Does your IRA once you die go ALL to the single surviving child, or does 50% go to the surviving child and 50% to the deceased child's heirs/estate? Assume the will states 50-50 for each child (I know the beneficiary overrides the will)

Can't find anything online about this.
bizlady is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-25-2022, 05:19 PM   #2
Full time employment: Posting here.
 
Join Date: Dec 2017
Posts: 976
If you want it to go to children of the deceased they probably should be named as secondary beneficiaries.
RetMD21 is online now   Reply With Quote
Old 09-25-2022, 05:38 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 12,457
Or add "per stirpes" for each beneficiary.

I don't know the answer but without this or secondaries I suspect it would all go to the surviving child.
RunningBum is offline   Reply With Quote
Old 09-25-2022, 05:47 PM   #4
Recycles dryer sheets
 
Join Date: Dec 2020
Posts: 129
link to Vanguard website Adding beneficiaries to your IRAs
oldtimer is offline   Reply With Quote
Old 09-25-2022, 05:56 PM   #5
Recycles dryer sheets
 
Join Date: Apr 2015
Posts: 192
For our Vanguard accounts, we have each other as primary beneficiary on our IRAs and our daughter as secondary. The statement below is from the beneficiary page at Vanguard.

"All primary beneficiaries have to be deceased before a back-up beneficiary receives assets. For example, if John and Jane Doe are listed as primary beneficiaries, and John passes away, Jane will get 100% of the assets (with no money going to the back-up beneficiaries)".
nap470 is offline   Reply With Quote
Old 09-25-2022, 07:30 PM   #6
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 938
Quote:
Originally Posted by nap470 View Post
For our Vanguard accounts, we have each other as primary beneficiary on our IRAs and our daughter as secondary. The statement below is from the beneficiary page at Vanguard.

"All primary beneficiaries have to be deceased before a back-up beneficiary receives assets. For example, if John and Jane Doe are listed as primary beneficiaries, and John passes away, Jane will get 100% of the assets (with no money going to the back-up beneficiaries)
By chance do you have that link? The person I’m trying to help wants her surviving children to be the recipients and she is concerned that if one child were to die that child’s share might go to grandchildren
bizlady is offline   Reply With Quote
Old 09-25-2022, 08:01 PM   #7
Recycles dryer sheets
 
Join Date: Apr 2015
Posts: 192
Quote:
Originally Posted by bizlady View Post
By chance do you have that link? The person I’m trying to help wants her surviving children to be the recipients and she is concerned that if one child were to die that child’s share might go to grandchildren
I don't think I can send a direct link because you need to be logged in to access it. When logged in go to Profile & Account Settings >Beneficiaries >Manage Beneficiaries. You can change/update beneficiaries. There is Q&A also. Hope that helps.
nap470 is offline   Reply With Quote
Old 09-26-2022, 08:48 AM   #8
Full time employment: Posting here.
 
Join Date: Dec 2017
Posts: 976
Quote:
Originally Posted by oldtimer View Post
Nice link, I didn't realize that Vanguard would let you designate by relationship (e.g. current spouse)
RetMD21 is online now   Reply With Quote
Old 09-26-2022, 09:06 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,912
This thread points up the reason we haven't built TOD and other automatic actions into our estate plan: They can be high maintenance. As our circumstances and assets change and our beneficiaries become adults, there is a maintenance level of work on our estate plan. To also have to be concerned about checking and tuning direct beneficiaries on multiple accounts is just not attractive. The automatic transfers also are not well suited to contingencies like dealing the death of a primary beneficiary. I get the attraction for some people, but it's just not there for us.

The ultimate "oops" of course is the life insurance policy with an ex-wife as beneficiary.
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 09-26-2022, 12:14 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Oct 2017
Location: Chapel Hill, NC
Posts: 4,827
Quote:
Originally Posted by OldShooter View Post
This thread points up the reason we haven't built TOD and other automatic actions into our estate plan: They can be high maintenance. As our circumstances and assets change and our beneficiaries become adults, there is a maintenance level of work on our estate plan. To also have to be concerned about checking and tuning direct beneficiaries on multiple accounts is just not attractive. The automatic transfers also are not well suited to contingencies like dealing the death of a primary beneficiary. I get the attraction for some people, but it's just not there for us.

The ultimate "oops" of course is the life insurance policy with an ex-wife as beneficiary.
So what do you do for your beneficiaries of an IRA?
harllee is offline   Reply With Quote
Old 09-26-2022, 01:24 PM   #11
Administrator
Alan's Avatar
 
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 31,920
Quote:
Originally Posted by oldtimer View Post
Thanks for this, and thanks to OP for the thread.

We will change our beneficiaries to “My Descendants”. Our son nearly died last year, a sharp reminder that these things happen.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
Alan is offline   Reply With Quote
Old 09-26-2022, 01:25 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 2,354
Quote:
Originally Posted by harllee View Post
So what do you do for your beneficiaries of an IRA?
Trust as beneficiary?
However, I think the secure act had impacts on this. Waiting for someone else here to add detail.

ETA: As Alan mentioned, they all "My descendants" which is per stirpes. So no need for trust?
copyright1997reloaded is online now   Reply With Quote
Old 09-26-2022, 01:26 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,912
Quote:
Originally Posted by harllee View Post
So what do you do for your beneficiaries of an IRA?
IIRC the attorney told us to make our rev trusts the beneficiary and backup beneficiary. So the IRA just ends up in the estate and subject to all the terms that deal with the various unanticipated events that can occur.
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 09-26-2022, 03:21 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,915
Quote:
Originally Posted by bizlady View Post
Does anyone know definitively how Vanguard handles traditional IRA beneficiaries if one of the beneficiaries died before the IRA account owner?

Let's say you have an account and name your 2 children.

One child dies and you do not change your beneficiaries.

Does your IRA once you die go ALL to the single surviving child, or does 50% go to the surviving child and 50% to the deceased child's heirs/estate? Assume the will states 50-50 for each child (I know the beneficiary overrides the will)

Can't find anything online about this.
If it is "Jane Doe 50%" and "John Doe 50%" as primary beneficiaries and Jane dies, then it would all go to John Doe. Jane Doe's estate and her descendants would get nothing.

If it is "Jane Doe per stirpes 50%" and "John Doe per stirpes 50%" as primary beneficiaries and Jane dies, then half would go to John and half would go to Jane's descendants (likely her children).

The only time that the will would come into play is if all of the primary and all of the contingent beneficiaries named predeceased the IRA owner.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 09-26-2022, 04:17 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,912
Quote:
Originally Posted by SecondCor521 View Post
If it is "Jane Doe 50%" and "John Doe 50%" as primary beneficiaries and Jane dies, then it would all go to John Doe. Jane Doe's estate and her descendants would get nothing.

If it is "Jane Doe per stirpes 50%" and "John Doe per stirpes 50%" as primary beneficiaries and Jane dies, then half would go to John and half would go to Jane's descendants (likely her children).

The only time that the will would come into play is if all of the primary and all of the contingent beneficiaries named predeceased the IRA owner.
And then there is the case where one of the deceased children has no living issue. Boring, boring, I have said it before: Anyone with significant money needs to consult expert help when doing estate planning. SGOTI just won't do it.
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 09-26-2022, 05:11 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,915
Quote:
Originally Posted by OldShooter View Post
And then there is the case where one of the deceased children has no living issue. Boring, boring, I have said it before: Anyone with significant money needs to consult expert help when doing estate planning. SGOTI just won't do it.
Agreed. I was only trying to answer OP's specific narrow question. I wouldn't expect anyone to do estate planning via Q&A on an internet forum. The former does sometimes lead to the latter, though.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 09-26-2022, 05:22 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,912
Quote:
Originally Posted by SecondCor521 View Post
Agreed. I was only trying to answer OP's specific narrow question. I wouldn't expect anyone to do estate planning via Q&A on an internet forum. The former does sometimes lead to the latter, though.
Sorry. I didn't intend to be picking you, just commenting on the general tenor of these types of discussions here. Most of us are volunteering information to the best of our knowledge. The problem is that "best" may not be good enough or may not be any good at all. My favorite internet cartoon:

https://en.wikipedia.org/wiki/On_the...ternet_dog.jpg
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 09-27-2022, 11:29 AM   #18
Full time employment: Posting here.
 
Join Date: Dec 2017
Posts: 976
Like Oldshooter we have designated a trust as beneficiary on advice of an estate planning attorney. On the other hand naming specific beneficiaries by name or relationship is a good option for many people. We wouldn't have used a trust just for the IRAs. There are some complications with naming a trust as an IRA beneficiary but out attorney seemed to know all about that.

There is some level of maintenance to updating beneficiaries. This is probably more of a problem for folks as they get to an advanced age.
RetMD21 is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Experience with elderly and deceased final tax return? Franklin FIRE and Money 9 01-16-2019 12:25 PM
Defining beneficiaries on IRA accounts JP.mpls FIRE and Money 14 04-24-2018 08:58 PM
spousal benefits and deceased spouse mathjak107 FIRE and Money 22 12-25-2017 07:05 PM
IRA/401k beneficiaries Dash man FIRE and Money 4 10-14-2017 04:01 PM
Estate planning question- 401k and IRA beneficiaries jIMOh Young Dreamers 8 05-18-2014 10:14 AM

» Quick Links

 
All times are GMT -6. The time now is 02:41 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.