![]() ![]() You may have changed your will so that an ex-spouse won’t get anything when you die. Deaths, marriages, divorces, births and other familial events can require updating your beneficiaries to reflect changing circumstances.īear in mind that beneficiary designations override wills. It’s a good idea to review beneficiaries, for all of your financial accounts, once a year or so. ![]() Should you change your mind at some later date, you can change the beneficiary designations. You may also be able to name a contingent beneficiary who will receive the funds if the named beneficiary dies before you or is otherwise unable or unwilling to accept the funds. If you name more than one beneficiary, the assets in your account will be divided equally among all the beneficiaries. You can’t, however, name a nonliving legal entity such as a corporation, limited liability company or partnership. You can name any living person or organization, including nonprofit charities and other trusts. You have considerable flexibility when naming POD beneficiaries. In most cases, your named beneficiary will be referred to as the POD beneficiary. Other names for this account type include In Trust For (ITF), Totten Trust or Transfer on Death account. A trust is a legal construction that is used to, among other things, shelter assets from probate after death.Īt many banks, your converted bank account will now be referred to as a Payment on Death (POD) account. To name a beneficiary to a checking or savings account, you have to convert the account into what amounts to an informal trust. If you are married and you don’t live in a community property state, however, a surviving spouse still may be able to dispute the terms of a beneficiary arrangement, just as they can dispute the terms of a will. Then the money in the beneficiary account is immediately transferred to their control. Armed with a certified copy of the death certificate, they can show up at the bank, present their identification and fill out a few forms. A major difference is that the beneficiary can collect the money immediately. If you name a beneficiary, the process looks very different. Half of the account balance will go to your spouse upon your death. If you’re married, the fate of your account funds is slightly different. And, if it becomes part of your estate, the money in your bank account can be used to pay off debts owed by the estate rather than going to a beneficiary you would prefer. If anybody contests the terms of your will, or if you have a complicated estate, probate can take months or years to complete. Probate is a legal process by which the assets of an estate are distributed under a court’s supervision. ![]() Then it has to go through probate before any of your heirs can access it. Unless a beneficiary is named, any money in your checking or savings account will become part of your estate after you’re deceased. The big benefit of naming a bank account beneficiary is that it allows the funds in the account to bypass the probate process after you die. Naming a beneficiary can be a valuable addition to your estate planning toolkit. However, there are good reasons to consider naming a bank account beneficiary, and the process is fairly simple. As a result, many checking accounts and savings accounts may not have a beneficiary. Do Bank Accounts Have Beneficiaries?īanks don’t generally require or usually even request holders of checking accounts to name a beneficiary. In either event, it’s generally not complicated or difficult and doesn’t require you to find a notary. Some bank beneficiary account rules let you do the process online. To name a beneficiary, you’ll likely be asked to fill out a form. Otherwise, you may not even be presented with the option. Generally speaking, it’s up to you to ask about naming a beneficiary. Unlike with other accounts, banks don’t require you to name a beneficiary when you open a checking or savings account. Beneficiaries, in general, are people or entities that the holder of an account designates to receive the assets in the account, typically, in the event of the account holder’s death. ![]()
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