Five Reasons You Should Add Beneficiaries to Your Account
Austin Carroll is a financial advisor at Cornerstone based in Reno, NV. Austin has passed his Series 65 Securities Registration Examination. He helps clients create customized financial plans based on their unique financial goals by addressing topics such as income, investments, and taxes.
FIVE REASONS YOU SHOULD ADD BENEFICIARIES TO YOUR ACCOUNT
We know how important it is that a person’s wishes be upheld after they pass. Proper planning is vital in making sure everything is set up according to your wishes and there isn’t any ambiguity with your accounts after you are gone. We want to make sure your loved ones do not have any additional stress during an already sad and stressful time. There are quite a few reasons to add beneficiaries to your account, in this blog, we will touch on five of those reasons.
#1 SIMFLIFYING PROBATE
The most obvious reason for wanting to name a beneficiary to your account is to create a simple and seamless probate process. Without getting into too much detail, when you pass away, your assets will enter the probate process. If you have named the beneficiaries, this process is simplified. However, if you have not named a beneficiary, the courts will have the legal obligation for distributing your assets. This can quickly become complicated and expensive. Therefore, by naming the beneficiaries you have already helped to create the legacy that you want to leave behind.
#2 PICKING WHO RECEIVES WHAT
To pick up where the previous section left off, by naming a beneficiary, you get to decide today who will receive what, and how much they will receive. For those that have a spouse, the typical beneficiary is the other spouse. However, if you are someone without a spouse or children, you may decide that you want to leave your assets to friends or charities. But what if you have multiple friends and charities that you like? Well, in that case, you can easily set up the beneficiaries of the account to distribute the amount however you see fit. For example, if there are two charities, you can do 50%/50%, 25%/75%, 80%/20%, etc. The choice is yours.
#3 BENEFICIARIES TRUMP ALL
In what may be the most surprising reason to name beneficiaries to your accounts, the beneficiaries will trump your will and trust. In the event of your passing and a trust has been established, the executor will by law go with the named beneficiary on the account. Some complications might arise if the estate plan has someone named and the beneficiary is different, so please consult your estate planner or financial adviser with help to avoid any potential conflicts.
#4 AVOIDING FAMILY FIGHTS
Unfortunately, fights over the inheritance of accounts and assets do happen. By naming a beneficiary of the account, it can help make clear what your intent and last wishes are with your assets. To keep an already stressful time from becoming anymore stressful, it’s important to keep the named beneficiaries up to date.
#5 HEIRS HAVE CHANGED
Finally, naming a beneficiary is not always about naming the person you want the assets to go to, but can sometimes be about who you want the assets to not go to. For instance, if your child and their spouse were the beneficiaries and they get a divorce, when you pass away, your ex-in-law could be entitled to the named beneficiary amount that was previously established on the account. Once again, not only is it important to name the beneficiary but it’s also important to keep them up to date.
WHERE TO GO FROM HERE
When deciding to add beneficiaries to your accounts, questions you have should be directed to your advisor. If you would like to discuss your options, please don’t hesitate to reach out to our team at Cornerstone to schedule a meeting. Call us today at (775)-853-9033 if you’d like to see how Cornerstone could help you.