What is a contingent beneficiary, and why should I consider naming a contingent beneficiary for my IRA?
Although the specific terms governing contingent beneficiaries can vary, the name “contingent beneficiary” generally refers to a beneficiary who will only be eligible to receive the assets of your IRA upon your death if your primary beneficiary has predeceased you. Most IRA providers will allow you to name one or more contingent beneficiaries in addition to your primary beneficiaries. Naming one or more contingent beneficiaries on your IRA can be a good “back-up plan” in the event you should forget to update your beneficiary designation upon the death of one of your primary beneficiaries. Before naming contingent beneficiaries, however, be sure your read the terms of the beneficiary designation form carefully to make sure you understand the circumstances under which the contingent beneficiary will be eligible to receive IRA proceeds.
