Updated 2026-03-30
401(k) Beneficiary Designations & SECURE Act Rules
Protecting your legacy: spouse rules, 10-year distribution rules, and estate planning
Your 401(k) beneficiary designation overrides your will. The SECURE Act of 2019 changed rules dramatically for non-spouse beneficiaries, requiring most to empty inherited accounts within 10 years.
Beneficiary Types and Rules
| Beneficiary Type | Distribution Rule | Can Roll Over? |
|---|---|---|
| Surviving Spouse | Lifetime RMDs or rollover | Yes, to own IRA/401(k) |
| Non-Spouse (post-2019) | 10-year rule | To inherited IRA only |
| Minor Child | Lifetime RMDs until 21, then 10-year | To inherited IRA only |
| Disabled/Chronically Ill | Lifetime RMDs | To inherited IRA only |
| Trust | Depends on trust type (see-through vs. not) | No |
SECURE Act 10-Year Rule
Most non-spouse beneficiaries must now distribute the entire inherited 401(k) within 10 years of the account holder's death. The IRS has clarified that if the deceased had already started RMDs, annual distributions are also required during the 10-year window.
Per Stirpes vs. Per Capita
Per stirpes passes a deceased beneficiary's share to their children. Per capita divides equally among surviving beneficiaries. Per stirpes protects grandchildren's inheritance and is generally recommended.
Frequently Asked Questions
Yes. Your 401(k) beneficiary designation takes absolute priority over your will. If you name your ex-spouse as beneficiary and forget to update it, they receive the money even if your will says otherwise. Review and update beneficiaries after major life events (marriage, divorce, birth).
Yes, but it adds complexity. A see-through (conduit) trust allows the oldest beneficiary's life expectancy for RMDs. An accumulation trust may trigger compressed tax brackets. Consult an estate planning attorney to structure this correctly.
Pavlo Pyskunov
Managing Director & Investment Fund Director
Pavlo Pyskunov analyzes employer-sponsored retirement plans using IRS publications and DOL Form 5500 filings, helping workers maximize their 401(k) savings through data-driven guidance.
Last updated: 2026-03-30