There is an unfortunate misconception that estate planning is reserved for Wills. While this is an incredibly beneficial tool as it provides a strong foundation for your estate, there are several tools you can utilize to help ensure your wishes are met according to your specifications. One such option is to designate beneficiaries to inherit your bank accounts. The following blog explores what you should know about the benefits of this option and the importance of discussing these matters with a Medina, Ohio estate planning lawyer to guide you through this process.
What Are the Benefits of Beneficiary Designation for Bank Accounts?
When planning your estate, you may find there are a surprising number of estate planning tools you can utilize to help protect your assets and provide for your loved ones. One such option is Beneficiary designations. This is a form of “Transfer-On-Death” or “Payable-On-Death” designation. Generally, appointing a Beneficiary designation is common for things like life insurance policies or IRAs. However, if you choose, you can name a Beneficiary to inherit your bank accounts.
One of the primary benefits of this is that designating a Beneficiary can help avoid Probate. For many, Probate is a tedious, lengthy, and expensive process in which the court must validate the Will of the deceased and oversee the distribution of assets to Beneficiaries. However, when you designate a Beneficiary, the bank account is paid to the inheritor immediately upon your passing and is not subject to Probate. As such, your Beneficiary will receive the asset immediately and the transfer will not be public record, as the rest of a Probate estate is.
What Steps Do I Take to Designate Beneficiaries?
If you wish to designate a Beneficiary for a bank account, you may be surprised to find this process is relatively simple. Generally, the first thing you must do is contact your bank and request a Payable-on-Death form. In some instances, this may be referred to as a Totten Trust Fund, because a Beneficiary designation is a kind of Trust Fund. When appointing a Beneficiary you’ll need to provide a considerable amount of information when completing the form. This includes their full name, contact information, and Social Security Number.
It’s important to understand that you can designate multiple Beneficiaries to inherit your bank accounts, including friends, family members, and even charity organizations. If you choose to appoint multiple Beneficiaries, you’ll find that you must explicate how you would like the contents of the account divided among the inheritors.
When you’re ready to plan your estate, it’s in your best interest to discuss your legal options with an experienced estate planning attorney. At Krause Law, our dedicated legal team will do everything possible to guide you through these difficult times to help you achieve the best possible outcome so you can have peace of mind for the future. Contact us today to learn how we can assist you in protecting your assets and Beneficiaries.
