Her IRA Names Her Husband as Beneficiary and No One Else. If He Dies First, the Money Could End Up in Probate

Many IRA owners name a partner on the primary beneficiary line at 100% and leave the contingent beneficiary line blank. That empty box on your IRA deserves five minutes of your weekend. With no contingent beneficiary on your IRA, the money could land in probate if your partner dies before you do.

Your Backup Heir Is Probably Missing

A contingent beneficiary is your backup. That person inherits the account if your primary beneficiary dies first or releases the money down, and the beneficiary form usually controls who inherits an IRA and generally overrides your will.

The important thing is that nobody on the form is alive. The custodian falls back on the default written into your account agreement, and many of those defaults point to your estate. In one IRS private letter opinion, the named beneficiary did not exist when the owner died, so the estate became the beneficiary by default. Money that goes to an estate usually goes through probate, the court process that settles a person’s affairs, which can mean months of waiting, court costs, and legal fees before your family gets a dollar.

Most estate tangles stem from a blank form, an outdated beneficiary, or an account that was never retitled. Our free guide includes the full cleanup checklist: Die With a Plan.

Estates Get Worse Tax Treatment Than People

Tax law treats people and estates differently. Under 26 U.S.C. § 401(a)(9)(E)(i), a designated beneficiary is “any individual designated as a beneficiary.” An estate isn’t an individual. IRS Publication 590-B, released January 21, 2026, spells out what follows: if the beneficiary is the owner’s estate, the 5-year rule applies.

That rule requires distributing the full balance by December 31 of the year containing the fifth anniversary of the owner’s death. That covers owners who die before their required beginning date. When the owner dies after that date with no designated beneficiary, payouts run on the owner’s life expectancy.

Named people often get more room. Most can spread withdrawals under the 10-year rule. These groups count as eligible designated beneficiaries. A surviving spouse, the IRA owner’s minor child, a disabled or chronically ill person, or someone not more than 10 years younger than the owner can generally qualify for more favorable withdrawal rules. Spreading withdrawals out can keep your heirs in lower tax brackets.

Who Should Check Their Forms Now

This hits anyone with an IRA, 401(k), life insurance policy, or annuity that lists one person and no backup. Married couples are the classic case, since partners tend to name each other and stop there. The stakes are biggest for people nearing retirement: families ages 55 to 69 hold 49.5% of all families’ defined contribution retirement wealth, according to Federal Reserve data for 2026 Q2. If you’ve already named backups and nothing in your life has changed, you’re likely covered.

Five Steps to Fill the Blank Line

1. Log in to every account and open the beneficiary page. Each IRA, 401(k), policy, and annuity has its own form, and none covers the others.
2. Name one or more contingent beneficiaries and assign percentages that add up to 100%.
3. Choose per stirpes if it’s offered. It means “by the branch.” If one of your kids dies before you, that child’s share goes to his or her children instead of getting split among your other kids.
4. Update the form after every marriage, divorce, birth, or death.
5. Keep the disclaimer option open. A primary beneficiary who doesn’t need the money can turn it down so it passes to the backup. A primary beneficiary generally has nine months after the owner’s death to make a qualified disclaimer. September 30 of the following year is the separate deadline for determining which beneficiary counts under the IRA distribution rules. With no contingent named, a disclaimer could push the money straight into the estate.

A 401(k) Plays by Stricter Spousal Rules

Federal law gives a surviving spouse a built-in claim on most 401(k) plans. Under 26 U.S.C. § 401(a)(11)(B)(iii)(I), the plan must pay the full vested balance to the participant’s surviving spouse unless the participant consents to someone else. That consent must be in writing and witnessed by a plan representative or a notary public, per § 417(a)(2). In practice, your spouse stays primary on the 401(k), and you use the contingent line for your planning.

Missed distribution deadlines also carry a penalty. The penalty applies to several groups. Any heir, estate, or person who leaves money in an inherited account past the deadline risks an excise tax equal to 25% of the shortfall, under 26 U.S.C. § 4974(a). A rushed 5-year window makes that error easier to make.

One Task Before Monday

Log in to every retirement account, policy, and annuity you own, and look at the contingent line. If it’s blank, fill it in. It takes minutes, and it decides whether your money goes straight to your family or waits on a probate judge.

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