Default beneficiary

Definition

 
A party who is treated as the beneficiary of a retirement account under the default provisions of the retirement plan document.
A beneficiary is a default beneficiary when the retirement account owner either fails to name a beneficiary for his/her retirement account, or is predeceased by the named beneficiary(ies) and (a) there is no contingent beneficiary and/or (b) no replacement beneficiary is named.
Also known as de facto beneficiary
Referring Cite
The governing plan document
 
Additional Helpful Information
 
For qualified plans and ERISA -403(b) accounts, the default beneficiary is usually the surviving spouse of the retirement account owner.
Many plan documents provide for a succession of default beneficiaries, in the event the first line of default beneficiary does not survive the retirement account owner.  For example:
o   The spouse is the beneficiary;
o   If there is no surviving spouse, the surviving children is the beneficiary-Per Stirpes or Per Capita;
o   If there is no surviving spouse or surviving children, the estate of the retirement account owner is the beneficiary.
Some default lines go from spouse directly to estate. Others go directly to the estate; however, this usually is not the case with qualified plans and ERISA 403(b) plans, as the spouse is almost always included in the default line.