What happens to your life insurance, 401(k), savings and checking accounts if something happens to you? If you have listed payable on death (POD) beneficiaries for all your eligible accounts, it can be a relatively straightforward process for your beneficiaries to receive distributions of these benefits. A POD beneficiary is one or more persons or entities that you designate as the recipient of your account benefits or assets in the event of your death.
When planning a Will, please keep in mind that beneficiary designations will generally override estate plan instructions such as Wills/Trusts. Be sure to talk with your accountant or financial advisor before designating a beneficiary, especially when naming a trust or estate as your beneficiary on an Individual Retirement Account (IRA).
But what happens if you have not designated any beneficiaries? Unfortunately, your family may face the burden of settling your estate through probate court, which can be a complicated, costly and lengthy process. It is important to note that a beneficiary only benefits when all account owners are deceased. Naming one or more beneficiaries ensures that your assets go directly to the charity or person(s) you choose, bypassing the probate process.
Setting a beneficiary to your accounts can be important as it may allow them to cover certain final expenses, such as funeral arrangements. This is a small step that provides peace of mind knowing your assets will be handled according to your wishes.
Protect your assets and help keep the hardship of your passing more manageable for your family members and loved ones.
Simple steps now can help save your family members from additional burdens in the event of your death. Take care of the people that matter the most and declare or update your beneficiaries today!
The opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. RCB Bank is a member FDIC.
