How to add and update account beneficiaries 

How to add and update account beneficiaries 

Account holders should regularly evaluate their beneficiary designations and update them after major life changes, such as marriage, divorce, or the birth/legal adoption of a child.

You can add and update beneficiaries for your clients by completing the appropriate form based on account type.

Contact your Schwab service team prior to submitting a beneficiary designation signed by a durable power of attorney. Designating or changing beneficiaries is an estate planning activity that requires additional authorization. Consult your estate planner for further information.

To add or update account beneficiaries, you will need the following:

All accounts
  • The account number for which you are updating beneficiary information
  • Your firm name and master account
  • The beneficiary's name, address, birth date, Social Security number or tax identification number, and relationship to the client
  • Adobe® Reader® or Adobe Acrobat® 7.0 or higher (download the latest version on the Adobe website)
In addition to the information above, the following information may be required for each account type:
For dollar denominated beneficiaries
  • A letter of authorization (LOA):
    • Signed and dated by the account holder
    • Providing instructions to handle a situation where the account value falls to a level that would cause the designation to fail
    • Providing instructions to handle a situation if one or more gifts cannot be made for other reasons
Form submission method
  • If using Beneficiary Digital Workflow with eAuthorization
  • If using DocuSign® to submit forms:
    • For existing Schwab clients, a complete Schwab Advisor Center® profile with the account holder's current email address and mobile phone number
    • For new-to-Schwab clients, the email address and a mobile phone number
    • All clients must use Schwab Alliance authentication or both text message (SMS) authentication and Knowledge Based Authentication (KBA)

The account holder can add or update beneficiaries online at schwaballiance.com. Alternatively, you can follow the steps below to submit the change using Beneficiary Digital Workflow with eAuthorization or forms.

  1. For DocuSign eligible forms, see How to use DocuSign. Select the applicable form, which will revoke any previous designations.
    • For an individual, joint tenants with rights of survivorship, or community property with rights of survivorship account, use the Designated Beneficiary Plan Agreement. There are specific requirements for designated beneficiary plan eligibility. If you select the per stirpes or per capita in Section 5, make sure to also select Yes or No for the Per Stirpes/Per Capita Distribution for each beneficiary.
    • For a contributory IRA, Roth contributory IRA, Roth conversion IRA, rollover IRA, SEP-IRA, SIMPLE IRA, inherited IRA, inherited Roth IRA, or 403(b)(7) account, use the Beneficiary Designation Form. If you select per stirpes or per capita in section 4, select Yes or No for the Per Stirpes/Per Capita Distribution for each beneficiary. 
    • For an education savings account, you or the current authorized party Tooltip can use the ESA Designated Beneficiary/Authorized Person LOA Form.
    • For a qualified retirement plan or individual 401(k) account, use the QRP Designation of Beneficiary(ies) Form.
    • For dollar denominated beneficiaries, instead of completing the beneficiary information on the form as normal, add the verbiage "See attached" and include an LOA signed and dated by the account holder and meeting the requirements listed in the What you'll need section.
  2. If the client has more beneficiaries than the form allows, use additional copies of the form to include all beneficiaries. Both primary and contingent beneficiaries must equal 100%.
  3. If the form is not eligible for DocuSign, print the form and obtain the appropriate client signatures. Send the signed forms to your Service team via a Schwab Advisor Center service request
  4. Any attachments submitted along with the Schwab form must be signed and dated by the account owner, and may require additional review. Speak to your service team prior to submitting any form with additional attachments.

Once you have submitted your request:

  • For forms submitted using DocuSign, see the What's next? section of How to use DocuSign.
  • The request will be reviewed and processed by your service team.
  • The client will receive a mailing to verify and/or correct any inaccurate information.
  • Alterations to the document content may not be accepted.
  • For any additional beneficiary changes, you must submit a new signed form completed in full by the client.
  • Clients who are named as beneficiaries in Schwab retirement or Designated Beneficiary Plan accounts will be required to complete new account applications and provide full documentation to receive inherited assets.
  • If you have questions, contact your Schwab service team.

To select a form, go to the Forms library on Schwab Advisor Center.

Form: Beneficiary Designation Form (IRA Change Beneficiary / IRA Update Beneficiary)
Form: Designated Beneficiary Plan Agreement (Transfer on Death / TOD / DBP)
Form: ESA Designated Beneficiary/Authorized Person LOA Form
Form: QRP Designation of Beneficiary(ies)
Resource: IRA beneficiary policy update FAQs
Resource: Digital Account Management Clickable Guide

What is Schwab's default distribution method if per-stirpes or per capita are not selected on the form?
Schwab's default distribution method when per-stirpes or per-capita are not selected is pro-rata.

My client resides outside of the United States, can they add a beneficiary to their taxable accounts?
No. Availability is based on domestic state law. Transfer on Death is not available to international clients.

My client resides outside of the United States, can they add a beneficiary to their U.S. retirement accounts?
Yes. U.S. retirement accounts are domestic products and are available for international clients to add beneficiaries to those respective accounts.

Is an authorized party required when designating beneficiaries?
No. Although an authorized party is highly recommended to assist Schwab in locating and/or identifying beneficiaries, it is not mandatory.

Can I designate per stirpes or per capita beneficiaries by writing "per stirpes" or "per capita" on the account form? 
No. To prevent the risk of beneficiary payouts that differ from the account holder's intentions, Schwab does not accept written instructions on the form. All per stirpes and per capita designations must be selected on the form.

My client has an old definition of per stirpes listed for their beneficiaries. Do they have to update their per stirpes designations on the new form or can they leave as is and Schwab will honor the original designation and definition?
Your client has no obligation to update their designation based on the release of the updated form. Schwab will honor the designation on file based on the definition the client signed.

My client signed the beneficiary designation form and chose per stirpes before the definition changed. How will my client's assets be distributed upon their death?
Schwab will honor the beneficiary designation selected when the client named their beneficiaries. Therefore, if the client designated their beneficiaries as per stirpes prior to Schwab implementing the new definition, we will honor the old definition for the client.

My client named beneficiaries years ago, before Schwab had a standard definition of per stirpes. How will my client's assets be distributed upon their death?
Schwab will honor the beneficiary designation selected when the client named their beneficiaries. Therefore, if the client designated their beneficiaries as per stirpes prior to Schwab implementing a definition of per stirpes, we will honor the designation as defined by the state governing the assets in the account.

What if all primary per stirpes beneficiaries predecease the account holder?
Schwab will distribute your named beneficiary's(ies') portion of your assets to his or her living children.

What if all primary per capita beneficiaries predecease the account holder?
Schwab will distribute the assets equally among all of the living children of your named beneficiaries, if any.

Are there any restrictions of availability for per stirpes beneficiary designation?
Per stirpes is not available for non-U.S. residents, qualified retirement plan (QRP) accounts, Keogh accounts, and i401(k) accounts.

My client did not name a beneficiary because they wanted their estate to receive the account assets. Will they need to update their beneficiary designation because of the Oct 1st, 2022 Line of Succession update?
Account holders should review their beneficiary designation to ensure their assets will be distributed as they intend. For account holders of Traditional, Rollover, Roth Contributory, Roth Conversion, SEP, SIMPLE, or Inherited IRAs who die on or after October 1st, 2022, the default beneficiary is “line of succession”. If the IRA account holder does not designate a beneficiary, the balance of the IRA shall be distributed in the listed order of priority to the following named person(s) surviving the account holder:

  1. Spouse
  2. Living children, (naturally or legally adopted) in equal shares; stepchildren are not legally defined as descendants for these purposes
  3. The account holder’s estate

How to handle deceased clients' assets
How to handle deceased clients' assets in organization accounts
How to use DocuSign®