When planning your estate, it’s important to explore all your options to ensure you can plan your estate as effectively as possible. Unfortunately, many assume they are relegated to a will as their sole option. However, one consideration you should make is whether or not a beneficiary designation for your bank accounts is in your best interest. The following blog explores the benefits of this option, how to designate beneficiaries to inherit these accounts, and the importance of working with St. Louis estate lawyers to guide you through this process.
What Are the Benefits of Beneficiary Designation for Bank Accounts?
One of the primary benefits of designating a beneficiary for your bank accounts is that it can help your heirs avoid probate. This is because a beneficiary designation is essentially creating a “payable-on-death” account, which serves as a form of an informal trust fund.
When you designate a beneficiary for your bank account, it’s no longer part of your estate upon your passing. As such, the funds in the accounts with a beneficiary designation will bypass the probate process and be transferred directly to your beneficiary. They will simply need to bring your death certificate to the bank to prove that you have passed, and the bank will transfer the funds to them. As such, your beneficiaries will have access to these funds much faster than if you were to leave them this asset in your will.
You should also note that if you designate beneficiaries for your bank accounts, you will retain full control over the assets held in the account for the entirety of your life. As such, you can revoke or change the terms and conditions of this designation. If you decide to pursue this option, you should review this document regularly to ensure it reflects your wishes.
How Do I Designate Beneficiaries for a Bank Account?
Though designating a beneficiary for a bank account can be a relatively simple process, it’s generally in your best interest to connect with an experienced attorney. However, you’ll find that completing these forms under the guidance of a lawyer can help ensure these forms are completed correctly to protect your assets and provide for your beneficiaries.
If you wish to designate beneficiaries for your bank account, you’ll find that the first step in this process is to contact your bank to request the necessary form. These will allow you to name your beneficiaries. If you wish to name multiple, you’ll find that you must note the percentage you would like each beneficiary to receive.
You are able to designate anyone as a beneficiary, including an individual, a charitable organization, or even a friend. If you wish to name a non-profit as your bank account beneficiary, you should first ensure that they are officially recognized as a charitable organization by the IRS.
On the other hand, you should note that the only entities that cannot receive beneficiary designation for bank accounts are LLCs, corporations, and partnerships.
If you are ready to explore the benefits of beneficiary designation, connecting with the team at Stobie Family Law Group is in your best interest. Our dedicated legal team will do everything possible to assist you during this time to help provide you with peace of mind for the future. Contact us today to learn how we can help you.
