Account Beneficiaries

What are account beneficiaries?

While opening an IRA and ESA account, you're required to designate estate beneficiaries. Your beneficiaries (or entities) take ownership of your account assets when you pass away.

You'll need to name at least one primary beneficiary, and the maximum number of beneficiaries you're able to have is six total between primary and contingent beneficiaries.

If your beneficiaries change over time, make sure to edit this and keep us up to date.

Tip:

However you decide to slice it up, beneficiaries need to receive 100% of your total assets.

Do I have to provide all the information for each beneficiary?

Fortunately, the only information you need to provide for each beneficiary is their name, the type of beneficiary (primary or contingent), their slice of your account assets and their relationship to the account owner.

While the other details we ask are optional, they help a lot if we ever need to distribute the assets.

What is the difference between primary and contingent beneficiaries?

After you pass away, primary beneficiaries receive your assets from an IRA or ESA. A beneficiary is either a person or an entity. And the division between recipients must total 100%.

You'll need to name at least one primary beneficiary before you open an account. You also have the option of naming contingent beneficiaries in case the primary beneficiary passes away.

Tip: If an IRA owner is married, certain states require their spouse be at least a 50% primary beneficiary of your IRA. Please consult a tax advisor for additional information.

How do I determine allocation amounts?

It's up to you. If you designate 50% of your account to one beneficiary and 50% to another, both will receive an equal share of the value of the account upon your death. For various reasons, you may want to give unequal shares.

Who can be a beneficiary?

Any U.S. citizen or resident alien (with a tax identification number) is able to be a beneficiary of an IRA or ESA account. Also, you can designate entities – groups or organizations (such as a trust or charity) – to be a beneficiary. The entity you name needs to be based in the United States.

Tip: Be sure to include as much information as possible about the entity, especially its Tax ID#.

How do I add a trust as a beneficiary?

To add a trust beneficiary to an account, we need to identify the parties in the trust and the trust must be irrevocable upon death of the account holder. To allow this verification, please send the following two items along with your ShareBuilder account number:

  • A letter requesting that we add the trust as a beneficiary. The letter must be signed and notarized or stamped with a Medallion Signature Guarantee.
  • A copy of the trust, or a trust certificate.

Mail to:

Capital One Investing, LLC
PO Box 4249
Seattle, WA 98194-0249

Or Fax to: 1-866-996-6417 (toll-free) or 206-805-0791

Note: Designating a trust as the beneficiary overrides any previous designations, so please include the following items for previous primary or contingent beneficiaries on your account: Name, relationship, Social Security Number, date of birth, address, and the percentage each beneficiary should receive.

What if my beneficiaries change?

Updating your beneficiary information is pretty quick. Just follow these instructions:

  1. Sign in at www.sharebuilder.com
  2. Go to Accounts > Overview > Profile & Settings > Account Settings (Sign In required)
  3. Choose your IRA or ESA from the Account drop-down menu
  4. Under 'Account Beneficiaries', click View / Edit
  5. Use the provided fields to enter new beneficiaries, or you can click Edit or Delete link to make changes to existing beneficiaries
  6. When you're done editing your beneficiaries, click Submit