Q: What do I need to know about designating beneficiaries on my financial accounts?
A: To properly designate beneficiaries on financial accounts, consider the following:
Designating beneficiaries on financial accounts is a good choice to pass assets at death without needing to probate or create a trust. Naming both a primary and secondary (contingent) beneficiary ensures protection in case a beneficiary pre-deceases you or an organization ceases to exist.
Naming minors requires caution, as minors cannot directly inherit funds in financial accounts. A custodian or trustee is appointed to manage the funds until the minor reaches adulthood or another applicable event occurs per state law.
Employee benefit plans, such as a 401(k), have special rules, particularly when naming someone other than your spouse as a beneficiary. Individual Retirement Accounts (IRAs) have similar rules and notice requirements around not naming your spouse as a beneficiary.
It’s important to compare designations on financial and retirement accounts with any designations made in your will or trust. In general, a designation on a financial account will prevail over a designation in your estate documents. Properly aligning your accounts and documents avoids potential conflicts.
Once you designate beneficiaries, update them as needed, especially after major life events such as marriage, divorce, the birth of a child, or the death of a family member. Consult a financial advisor or estate attorney to ensure your designations are appropriate and comply with state laws, considering any tax or estate implications.
Your investment professional at Alpine Bank Wealth Management will work with you to ensure your beneficiary designations are correct and complete.
Jesse Bopp, J.D.
Vice President
Alpine Bank Wealth Management
Products of our Wealth Management service are not FDIC insured, may lose value, and are not bank guaranteed.
| FIND A SURCHARGE-FREE ATM! | |
|
|
|
|
|