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April 19, 2009

De Facto Beneficiary

Your Guide



A party who is treated as the beneficiary of a retirement account under the default provisions of the retirement account plan document.
A de facto beneficiary usually exists when the retirement account owner either fails to name a beneficiary for his retirement account, or is predeceased by his named beneficiary(ies) and (a) there is no contingent beneficiary and/or (b) no replacement beneficiary is named.
Also known as default beneficiary
Referring Cite
The governing plan document
Additional Helpful Information
  • For qualified plans and ERISA 403(b) accounts, the de facto beneficiary is usually the surviving spouse of the retirement account owner.
  •  Many plan documents provide for a succession of de facto beneficiaries, in the event that the first line of de facto beneficiary does not survive the retirement account owner.  For example :
oThe spouse is the beneficiary;
oIf there is no surviving spouse, the surviving children are the beneficiaries-Per Stirpes or Per Capita;
oIf there is no surviving spouse or surviving children, the estate of the retirement account owner is the beneficiary.
  • Some de facto lines go from spouse directly to estate. Others go directly to the estate; however, this usually is not the case with qualified plans and ERISA 403(b) plans, as the spouse is almost always included in the de facto line.

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