Per Stirpes Beneficiary Designation for IRAs and 401ks

**Per stirpes** means "by branch" - if you name your children as beneficiaries per stirpes, and one of your children dies before you, **their share passes to their children (your grandchildren)** rather than being redistributed to your surviving children.

• Protects grandchildren from being disinherited
• Keeps inheritance in family branches
• Applies to IRAs, 401ks, life insurance, and other accounts
• Must be explicitly stated on beneficiary forms

Most IRA custodians allow per stirpes designation, but the process varies by institution.

• **Step 1:** Contact your IRA custodian (Fidelity, Vanguard, Schwab, etc.)
• **Step 2:** Request a beneficiary designation form
• **Step 3:** Name your children (or other beneficiaries) with percentages
• **Step 4:** Add per stirpes language - either a checkbox or written notation
• **Step 5:** Complete contingent beneficiaries section (also per stirpes)
• **Step 6:** Sign and submit
• **Step 7:** Request written confirmation

401k per stirpes designation can be more restrictive due to ERISA spousal protection rules.

• **Important:** If married, spouse must consent in writing to non-spouse beneficiaries
• **Step 1:** Access your 401k provider portal or request form from HR
• **Step 2:** If married, obtain spousal consent form (notarized)
• **Step 3:** Name beneficiaries with percentages
• **Step 4:** Look for per stirpes checkbox or add "per stirpes" after each name
• **Step 5:** Submit form to plan administrator
• **Step 6:** Verify acceptance and request confirmation letter

Follow this checklist to ensure your per stirpes designation is properly recorded.

1. 1**Gather account information:** List all retirement accounts (IRA, 401k, Roth IRA, etc.)
2. 2**Review current beneficiaries:** Pull existing forms to see who is currently named
3. 3**Decide on distribution:** Determine percentages and whether to use per stirpes
4. 4**Request new forms:** Contact each custodian or plan administrator
5. 5**Complete forms accurately:** Name beneficiaries with SSN/DOB and percentages
6. 6**Add per stirpes language:** Check box or write "per stirpes" after each name
7. 7**Include contingent beneficiaries:** Name backups also per stirpes
8. 8**Obtain spousal consent:** If required (married + 401k + non-spouse beneficiaries)
9. 9**Submit forms:** Follow each institution's submission process
10. 10**Request confirmation:** Get written proof that per stirpes was recorded
11. 11**Store securely:** Keep copies with estate planning documents
12. 12**Review every 3-5 years:** Update after births, deaths, divorces, marriages

Avoid these frequent errors that can defeat your per stirpes intentions.

• **Mistake 1: Assuming it's automatic**
• Per stirpes is NOT the default. You must explicitly designate it on forms.
• **Mistake 2: Using unclear language**
• Writing "all my children" without per stirpes may default to per capita. Be explicit.
• **Mistake 3: Forgetting contingent beneficiaries**
• Primary per stirpes doesn't help if all primary beneficiaries predecease you.
• **Mistake 4: Not reviewing after life changes**
• Birth of grandchildren, death of a child, divorce - all require beneficiary updates.
• **Mistake 5: Relying on your will**
• Beneficiary designations override wills. Your will cannot change per stirpes designations.
• **Mistake 6: Different designations across accounts**
• IRA says per stirpes, 401k says per capita - creates confusion and unequal inheritance.

These examples show exactly how per stirpes beneficiary designation affects IRA and 401k distributions.

• **Example 1: Traditional IRA with Per Stirpes**
• $500,000 IRA, 3 children named per stirpes (equal shares)
• Child #2 dies before you, leaving 2 grandchildren
• Distribution:
• - Child #1: $166,667 (1/3)
• - Grandchild A (from Child #2): $83,333 (1/6)
• - Grandchild B (from Child #2): $83,333 (1/6)
• - Child #3: $166,667 (1/3)
• **Example 2: 401k WITHOUT Per Stirpes**
• $400,000 401k, 4 children named equally (no per stirpes)
• Child #3 dies before you, has 3 children
• Distribution:
• - Child #1: $133,333 (1/3 of $400k)
• - Child #2: $133,333 (1/3)
• - Child #3's 3 children: $0 (excluded)
• - Child #4: $133,333 (1/3)
• **Example 3: Roth IRA with Mixed Designation**
• $300,000 Roth IRA
• - 50% to spouse (not per stirpes - doesn't apply)
• - 50% to 3 children per stirpes
• Child #2 dies before you, has 1 child
• Distribution:
• - Spouse: $150,000 (50%)
• - Child #1: $75,000 (25%)
• - Grandchild from Child #2: $75,000 (25%)
• - Child #3: $75,000 (25%)