Taking time to ensure your accounts have proper beneficiary information listed is important to protect your legacy for future generations. In qualified accounts like a 401(k) plan, when you pass away, your assets will transfer directly to your named beneficiary. They do not go through the probate or estate process.
A primary beneficiary, typically a spouse, would be the first person to receive the assets in the account at the time of your passing. This can be more than one person as well. For example, if your heirs are your two children, you can leave assets equally to them as 50% primary beneficiaries each. A contingent beneficiary would receive the assets in the event that your primary beneficiary has already passed away at the time of your passing.
We encourage you to review and update beneficiary information on all your qualified accounts every year to ensure any changes in your situation are being reflected and are aligned with your wishes when you are no longer able to communicate them to your loved ones.