Portal
Let's talk
  • What we do
    • Wealth management services
    • Our approach
    • Working together
  • About us
    • Our team
    • Our company
    • Community engagement
    • News and events
  • Insights
  • Careers
  • Contact us
  • Portal login
  • Disclosures
The latest insights
  • The midterms and your portfolio: what history tells us
  • Separately Managed Accounts: What they are and when they make sense
  • All-time high? Or just another Thursday?

Designating Beneficiaries—Where There’s A Will, There’s Not Always An ‘Easy’ Way

October 7, 2014
Author: Vista Capital Partners

Despite having an up-to-date will, you may not have selected the best way to pass on retirement account assets to your heirs. According to a recent study, most Americans believe their retirement accounts will be divided according to instructions in their wills. In fact, retirement accounts pass according to the beneficiary designations on file with the account custodian.

One common mistake is naming an estate as beneficiary. This error can be committed directly or indirectly since in the absence of a specific designation the estate is the assumed beneficiary. When an estate is named beneficiary of an IRA, all assets in the IRA must be withdrawn within five years of the account owner’s death. This can result in increased taxes and the loss of significant tax-deferred growth potential.  Additionally, when an IRA passes to the estate, beneficiaries named in the will won’t receive their share until probate (sometimes a lengthy process) is complete.

Designating a spouse as beneficiary allows him/her to assume immediate ownership of their deceased spouse’s IRA. This preserves all the benefits of tax deferral enjoyed by the original account owner and provides the beneficiary the most control over when withdrawals are taken and taxes become due. Designated non-spouse beneficiaries are also permitted to enjoy some of the original tax-deferral benefits by establishing inherited IRAs.  Inherited IRAs are subject to annual required minimum distributions, but beneficiaries are effectively allowed to “stretch” withdrawals and taxes over their lifetimes.

Regularly reviewing beneficiaries on all accounts which keep designations on file is your first line of defense. All designations should be consistent with the estate planning put in place with the help of an attorney. Life-changing events, such as marriage, divorce, or the loss of a loved one, should warrant a review of beneficiary designations. Due to legal inconsistencies when compared to married couples, registered domestic partners should consult an attorney to ensure their accounts pass according to their wishes.


Article tags
Estate planningRetirement

Related articles
Financial planning

Investing in a career: the expanding role of the 529 college savings plan

August 27, 2026By Whit Peters

529 plans now cover more than college — trade school, apprenticeships, grad school, and professional credentials. See how the flexibility can play out in practice.

Financial planning

529 plans turn 30: still the smartest way to save for college

June 19, 2026By Rob Greenman, CFP®

Tax-free growth and consistent contributions can turn into significant college savings.

Financial planning

What The “One Big Beautiful Bill Act” Means For You

ArticleNovember 24, 2025By Jon Gannon, CFP®

This past summer, Congress passed the One Big Beautiful Bill Act (OBBBA)—an ambitious name for a law that brings something surprisingly practical: stability.

Subscribe to agenda-free news, tips, and analysis, delivered to your inbox.

This field is for validation purposes and should be left unchanged.
  • Legal Disclosures
  • Form CRS
  • Client Portal
  • Cookie Policy
  • Legal Disclosures
  • Form CRS
  • Client Portal
  • Cookie Policy
  • Legal Disclosures
  • Form CRS
  • Client Portal
  • Cookie Policy
Contact us
© Vista Capital Partners 2026. 100% employee-owned.
Manage Consent

We use cookies to track website performance. View our Privacy Policy for details.

Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
  • Manage options
  • Manage services
  • Manage {vendor_count} vendors
  • Read more about these purposes
View preferences
  • {title}
  • {title}
  • {title}