- a person, organization, etc., that is helped by something
- someone or something that benefits from something
- a person, organization, etc., that receives money or property when someone dies
We often think of beneficiaries when we are writing a will or getting life insurance. But there are places where designating a beneficiary is also important.
An important place to name a beneficiary that is often overlooked is at the bank. You can (and should) name beneficiaries for your bank accounts. What this ensures is that when you are no longer there to write that check to pay the electric, rent, whatever, someone will have access to your monies to maintain life necessities after you’re gone.
So is this really important?
Absolutely! If you don’t name someone as the beneficiary, those monies in both checking and savings accounts can be frozen throughout the probate process, burdening someone with having to cover expenses and to be reimbursed at a later time.
Another often forgotten place where we state beneficiaries is on IRAs. Do you remember setting up that IRA when you went to work for your employer? Are those beneficiaries still the correct ones? Have you experienced a major life event such as a wedding, birth of child or divorce? This is a great time to check out who is listed and make changes where necessary.
This should also serve as another reminder that designated beneficiaries of any insurance, IRA and checking account do take precedence over what is designated in a will. Being aware of these conditions is important as you are making your estate planning decisions.
See your local banker or financial services expert and make sure you have the proper documents in place to avoid this hazard in the future. If you have questions, please give us a call and let us assist you in finding all the correct information. We are here to help!
Disclaimer: We do not give tax or legal advice. Please see your accounting professional or attorney for further assistance.