One of the goals of estate planning is to avoid probate. If you already have an estate plan, you may have already designated a beneficiary to your bank accounts to receive the proceeds upon your death. Sometimes these accounts are referred to “Totten Trusts” or “Payable Upon Death” (P.O.D.), but the effect is still the same: to have these accounts go directly to the person or persons you designate as the beneficiary or beneficiaries. Most of the brick and mortar (B&M) banks, such as Wells Fargo, Washington Mutual, Bank of America, should allow you to designate a beneficiary for your account(s). Generally, all the information you need is:
- The name of the beneficiary;
- The social security number of the beneficiary;
- The date of birth of the beneficiary; and
- The address of the beneficiary
If you are considering opening an new account with an online bank offering high yields, please research as to whether such accounts allow for designation of beneficiaries. Some online banks accounts such as ING Direct Orange Saving or Electric Orange checking account do not allow you to designate a beneficiary. However, it will allow you to register your account as a “living trust account.”
FNBO Direct, an online bank that was rated #1 by personal finance blog Consumerism Commentary, is one online bank that allows you to designate a beneficiary for your account.
So if you don’t have a trust or estate plan set up yet and have bank accounts, ask to see if you have beneficiaries designated for those accounts. If not, set those up so the money will go where you want it to go upon your death.
Related posts:
[...] to Your Retirement Accounts Posted by Dan on August 13, 2009 Estate Planning Awhile back I posted about adding beneficiaries to your bank accounts as part of your overall estate plan. This allows the money in those accounts to go directly to the [...]