Who Gets Your Money?
“You’re the beneficiary of the cruelest kind of murder… murder for profit!” - THE CHANGELING
written by William Gray & Diana Maddox, directed by Peter Medak
(2.5-minute read)
Do you know who gets your money in the event of your sudden passing? It’s generally not something we like to think about, let alone plan for, but it’s incredibly important. It can also be very easy to set up. By simply naming a beneficiary on your financial accounts, you can direct the funds to that person when you pass away. You can’t just say it loudly at Thanksgiving and expect it to go smoothly. You actually have to take appropriate action.
WHAT’S IN A NAME?
To put it simply: a beneficiary is the person who gets your money when you die. But you have to name that person within your account documents. You can often do this by logging into your account and manually updating your beneficiary designation. Some institutions will add other levels of security.
You don’t necessarily have to give your money to one person. You can name more than one beneficiary to each account. If you want all three siblings to get 33% of your money, then you are free to do that. If you like your brother more than the other two, then you can give him a bigger cut. It’s up to you. It’s your money. But you have to make sure you name everybody and designate who gets the appropriate percentage.
WILL WON’T
If you have a Will or Trust, you may assume that your wishes will be carried out according to those documents. So if you updated your Will, you’re good! Right? Not so fast. The named beneficiary on your account supersedes your Will. So if you forgot to update your beneficiary then your ex-boyfriend might be inheriting your Savings Account.
I’LL BE DEAD!
Have you ever heard of probate court? Without getting too “in the weeds” just understand that’s where your assets go if they’re not properly assigned during your lifetime. Each state is different when it comes to probate laws. Among other issues, they differ in asset minimums that qualify for probate, processing times, and costs. An attorney recently told me that, for simple probate cases in California, it takes about 18 months and costs around $20,000. This means that if you have a grieving family member who could use that money, they may not have access to it for a year-and-a-half, if ever. This can be avoided by properly naming your beneficiaries.
REVIEW, REVIEW, REVIEW
You should always review your beneficiary designations, even if you know they’ve been updated. There have been numerous cases of exes forgetting to change the beneficiary on one of their accounts even though they swore they had done it. If you named a parent who has since passed away, then you will want to update your beneficiary designation.
If you have ever transferred your funds from one financial institution to another, you should double-check that your beneficiaries also transferred along with it. That doesn’t always happen. You will probably have to sign a new document with your new institution so that they have it in their record books. By the way, don’t confuse “Trusted Person” with beneficiary. That is not the same thing. They may be the same person, but if you named a Trusted Person on your account that does not mean you named a beneficiary.
Institutions make mistakes. Technology can glitch. Your beneficiary designation may disappear without your knowledge. By reviewing all of your accounts you can avoid expensive, time-consuming mistakes for your loved ones.
If you’d like more information about beneficiaries you can schedule a complimentary meeting HERE.
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