Assets Beneficiary – What to Think About When Opening Up a Bank Or Securities Account
October 21st, 2009 Filed under: ab trust,Executor Fees,sample wills,Trusts attorney — Estate Planning Author
It is a common error for people to think that when a family member passes away, the assets of that family member are given to beneficiaries by way of that person’s will.�What some people do not know is that certain assets including some checking and savings accounts, mutual funds accounts, one’s home and retirement accounts, may not have to pass through the dead person’s will but instead go to the person named on each account as a beneficiary.�
A person’s will does not always control all of their assets when he or she dies.�When an account is set up or financial assets are deposited into a bank, the bank employee will offer the account holder the opportunity to name a beneficiary for it in case something happens.�However, if no beneficiary is selected, the one person would be the only one who has access to the account.
It is sometimes important to add a beneficiary for an asset since the asset is not required to go through probate which can be a very long and expensive process involving a judge ruling on the assets of the dead person’s estate.�� Also by deciding on a beneficiary at the time, you may help your heirs save on paying a lot of taxes.�Other typical beneficiaries could be charities or trusts in addition to non-family member individuals.�
Minor children should not be set up as a beneficiary because their lack of financial knowledge.�In addition, if you add a minor child, you would also need to set up a guardian for the minor child to represent his or her interest.�This could add legal and accounting costs, which are unnecessary. �
Finally, make sure to review your list of beneficiaries on an annual basis just to make sure they are current.�If relationships change whether it be with an individual or an entity, you want to ensure that your assets go to the right place.
