How to name beneficiaries and fund a trust at Betterment

A trust can be named as beneficiary of a taxable account or an IRA.¹

Betterment only supports account holders and beneficiaries 18 or older, and does not recommend naming a minor.¹

Naming a non-U.S. resident as beneficiary may delay distribution.¹

The owner allocates percentage shares across the named beneficiaries. Contingent beneficiaries can be named where the account type supports it.¹

Betterment Checking supports a primary beneficiary only and does not support contingent beneficiaries.²

For a 401(k), a legally married participant's spouse must be the sole primary beneficiary unless the spouse consents in writing before a notary or plan representative on Betterment's spousal consent form. Misrepresenting marital status may invalidate the designation.³

If an IRA contains community property and the spouse is not the primary beneficiary for at least 50% of the account value, the owner represents and warrants that the spouse has consented to the designation.¹

For employer retirement plans. Completed by the participant's spouse, before a notary or plan representative. Available to download.³

Beneficiary designations generally take precedence over estate planning vehicles such as a will or trust, subject to applicable law.¹

Designations may be changed or revoked at any time during the owner's lifetime. Any change or revocation must be provided in writing through the Betterment interface.¹

On a joint account, including joint checking and joint investing accounts, the surviving holder can revoke or change the beneficiary designations after the first holder's death. Only assets held in the account after the last holder's death go to the named beneficiaries.¹

Where a minor is named, Betterment may require court-appointed custodial documentation or an official guardian before funds are transferred, and distribution may be delayed.¹

For a 401(k), if no designated beneficiary survives the participant, or Betterment Securities as custodian cannot locate them, benefits go to the spouse if living, then to the children in equal shares, then to the estate.¹

A trust account can be opened for a U.S. domestic trust, revocable or irrevocable, that was previously established, is in good legal standing and is authorized to invest in securities.⁴

A client can hold a personal account and multiple trust accounts under one login, with separate 1099-B and 1099-DIV forms for each TIN.⁴

A trust cannot be the owner of a Betterment IRA. A trust can be named as the IRA's beneficiary.⁴

Betterment Checking cannot be opened as a trust account.⁴

Cash Reserve funds move to a trust Cash Reserve only on an email request to Betterment.⁴

Converting a personal account is an asset transfer between two accounts rather than a retitling. Betterment does it only where the trust's EIN is identical to the personal account owner's SSN.⁴

The person opening the account must be the trustee of the trust. A trust account may have a minor as the trust's beneficiary, but the trustee must be at least 18.⁴

Only authorized trustees get account access, not the grantor and not the trust's beneficiaries. Additional trustees can be given their own logins on request by email.⁴

Betterment never asks for the full trust agreement, only the title page and signature page(s) or a notarized Trust Certificate.⁵