Most Americans today have some type of a tax deferred account. For many retirees, this is their largest asset excluding their home. Many of these individuals are unable to tell you what happens to that account when they die.
Any tax deferred account is distributed upon death by the directions you have placed in writing with the institutional custodian holding your account. If you do nothing your estate will be the beneficiary. Most individuals make their spouse the primary beneficiary and the children as contingent beneficiaries. Here are a few alternatives relating to children and grandchildren.