If you've started an IRA, CD, brokerage account, or bought an annuity, life insurance policy, or mutual fund shares, you've been asked to choose a beneficiary.
What Is a Beneficiary?A beneficiary is a person who will inherit your bank account when you die. While most accounts do not require you to name a beneficiary, it is one path to make sure your money is distributed properly to your loved ones.
Can You Put a Beneficiary on a Bank Account?While there are some banks that don’t allow you to name a beneficiary for your accounts, most will.
To name a beneficiary on a bank account, you must make it a trust, which shields your assets from probate. Banks call beneficiary accounts Payment on Death (POD), In Trust For, Transfer on Death, Totten Trust or Transfer on Death.
How does a bank account beneficiary work? You must notify the bank when an account owner dies. As a beneficiary, all you need to show is your ID and a death certificate.
Putting your bank accounts in a living trust can help your heirs avoid probate. When you die, the trustee can transfer your account without probate.
You know that adding a beneficiary to your bank accounts enables you to leave those funds to the person you want and makes it easier on them allowing them to skip the probate process.
ou’ll need to convert the accounts into a POD, which is a kind of informal trust, before you name the person, people or organization to whom you want your money to go.