Estate planning is important for seniors. Making plans for how your assets will be divided up after you pass away can simplify things for your loved ones and allow them to receive funds more quickly. Adding a beneficiary to your checking or savings account is one way to make settling your estate easier.
A beneficiary is someone who'll receive something after a person dies. You often hear the term in relation to insurance policies, where the beneficiary is the one who gets the death benefit.
The term has the same meaning for checking and savings accounts. Once you pass away, the bank gives the money directly to the beneficiary.
With a joint account, the other person you list shares ownership of the account. If your joint account title lists you "or" someone else, each of you can withdraw money, get account information and make changes to or close the account. A joint account labeled you "and" someone else requires both of your signatures to make withdrawals or changes.
Beneficiaries don't own your account. They can't withdraw money while you're alive or even get information about the account balance. Only after you die will the beneficiary receive access to the money.
Some key benefits of having a beneficiary on a bank account include:
Despite their benefits, beneficiary savings and checking accounts do have some drawbacks you need to be aware of. They include:
Most financial institutions will allow you to name more than one person as a beneficiary. Each beneficiary will receive an equal amount of the balance. For example, two beneficiaries would each get 50%, while four beneficiaries would get 25%.
Your beneficiary doesn't have to be a person. Most banks will allow you to name a for-profit business, trust or nonprofit organization as a beneficiary.
When selecting a beneficiary or beneficiaries, consider:
In most cases, you'll need to visit your financial institution's branch office in person to add a beneficiary. Call ahead and set up an appointment to avoid a long wait. Autumn View Gardens senior living community offers scheduled transportation as a lifestyle amenity for residents. Take advantage of the service to get to your bank or credit union in Creve Coeur, MO.
To verify your identity, your financial institution may require you to present your driver's license or a state-issued ID card. If you don't have one, ask what forms of identification are acceptable when you schedule the appointment.
Your beneficiary doesn't have to be present for the appointment, but you'll usually need to have key information about them, such as:
If you wish to name a nonprofit organization or a business as your beneficiary, you'll need:
Once you've added a beneficiary to the account, be sure to store the documentation in a safe place along with other documents like your will or life insurance policies.
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