Designating Beneficiaries for Financial Accounts

One way to ensure your loved ones are provided for after your death is to assign beneficiaries directly to your financial accounts. Sometimes referred to as "beneficiary designation," this option lets your loved ones avoid the hassle and expense of probate court.

Advantages of Beneficiary Designation

One advantage of adding beneficiaries to your financial accounts is it helps make the overall process easier for your loved ones and the executor of your will. Your loved ones might avoid the complication of probate if you add direct beneficiary designations. In most other cases, assets and property must go through the probate process, even if you have a Last Will and Testament.

The Beneficiary Designation Process

There is no standard form for adding beneficiaries to your different financial accounts. You will need to contact each financial institution to learn the correct procedure. Follow their instructions correctly to avoid complications when your beneficiary attempts to access the account. 

Generally, you will need to fill out a specific form for each bank or financial institution and include the information of your chosen beneficiary. Be sure to ask about the policies regarding changing or revoking a beneficiary designation. 

Additional Details

Even though you don't need a lawyer to add beneficiaries to your financial accounts, you may still consider consulting an attorney if your estate is worth over $5 million. 

Beneficiary designation doesn't take the place of a proper will. You still need a Last Will and Testament to list your final instructions and give details regarding the rest of your estate.