If you’ve already planned your estate by creating a will, you may be relieved that this process is over. However, it’s important to understand the additional estate planning tools and options to ensure that your estate is distributed efficiently and in accordance with your wishes. One option you may be unfamiliar with is choosing to designate beneficiaries for your bank accounts. If you’re unsure what the benefits of this option are or the steps involved in the process, you’ll want to keep reading. In addition, you’ll learn how a Nassau County estate planning lawyer can help you through these matters so you can achieve peace of mind for the future.
What Are the Benefits of Naming Beneficiaries for Bank Accounts?
Designating a beneficiary for assets is also known as a payable-on-death designation. Beneficiary designation acts like an informal trust. This allows the named inheritors immediate access to the funds upon your passing. Naming beneficiaries for assets like bank accounts has several benefits.
One of the primary benefits of designating beneficiaries for your bank accounts is that it can help avoid probate. This is because the assets will immediately be transferred to your beneficiaries, provided they take a copy of the death certificate to the bank and confirm their identity. This is ideal, as probate can be a long and tedious process that leaves your beneficiaries without the assets left for them until the completion of the process, which can take up to a year, if not longer, for more complex estates.
Additionally, because this only becomes active upon your passing, you retain full control over your bank accounts during your lifetime. Unlike other options, which cause you to relinquish ownership of assets, naming beneficiary designations allows you to continue as normal, spending funds and even closing the account if you wish.
What Steps Must I Take to Designate Beneficiaries?
Designating a beneficiary for your bank account can be simple. Generally, the first step is to contact a representative at your financial institution to initiate the process. They will send you the forms you must complete, which typically entail naming a beneficiary. If you wish to name multiple beneficiaries, you may do so, but you must determine how much of the account they will receive. Once you have completed the form, you can return it to the bank, where they will store it on file.
It’s important to understand that you can name anyone of your choosing to be the beneficiary of a bank account, from a friend or family member to a charity organization. The only exceptions are corporations, partnerships, and limited liability companies.
As you can see, there are several benefits you can reap if you choose to designate a beneficiary for your bank account. Though this process may seem simple, it’s in your best interest to discuss your legal options with an experienced attorney first. At Barrows Levy PLLC, our dedicated team can assist you through the process of exploring your options and completing the necessary forms so you can rest assured that your wishes will be honored upon your passing. When you need help, don’t hesitate to contact our team today.
