Who Should I Name the Beneficiary of My Bank Account?

Continue reading to learn who you should name as the beneficiary of your bank account and how an experienced estate planning attorney in Putnam County, at The Law Office of Andres D. Gil, PLLC, can help you make a wise and sound decision.

What bank accounts allow for beneficiary designations?

If you are opening a new bank account intending to have one of your loved ones inherit it, you may go with a payable on death account. As the name suggests, this bank account will automatically transfer your funds to your named beneficiary upon your unfortunate passing.

An alternative is that you may ask your financial institution if you can convert your existing bank account into a payable on death account. Or, you may simply fill out and file a beneficiary designation form to add a beneficiary to your existing account.

This is not to forget that aside from your standard bank accounts, your brokerage accounts, retirement accounts, life insurance policies, and annuities may offer you beneficiary designation options. Any of these methods are valid and beneficial as they allow your funds to bypass the probate process and go directly into the hands of your intended beneficiaries.

Who should I name as the beneficiary of my bank account(s)?

If you are married, it may seem natural to name your spouse as the designated beneficiary of your bank account(s). But you may want to include your children in this too.

First, though, you must consider whether they have already reached the age of maturity. If not quite yet, it is best to name the children’s guardian as the beneficiary instead, which may be your spouse or a trusted adult should your spouse predecease you. This guardian may manage these funds on behalf of your children for the time being, similar to a trustee of a trust fund.

On another note, though, if any of your children have special needs or a disability, you may sooner set up a special needs trust in their name. This is because inheriting significant funds from a bank account may have seriously negative implications on their eligibility for government-funded benefits programs.

When should I change the beneficiary of my bank account(s)?

You and your spouse may eventually go your separate ways in your divorce. One of your children may sadly no longer reach out to you and their contact information or mailing address is left unknown. One of your close friends may explicitly express to you their unwillingness to inherit your funds for personal reasons. In any of these scenarios, you should reach out to your financial institution to change the beneficiary designation on your bank account(s).

In case these circumstances change suddenly and unexpectedly, it is ideal if you have a contingent beneficiary added to your bank account(s). This individual may serve as a backup should your primary beneficiary be unable or unwilling to accept this inheritance for the reason mentioned above or otherwise.

Before entering these proceedings, you should have already hired a skilled estate planning attorney in Putnam County to represent you. So, if you have not done so already, please contact The Law Office of Andres D. Gil, PLLC today.