Why a Beneficiary is the Benefit Your Financial Account Needs

Why a Beneficiary is the Benefit Your Financial Account Needs

When opening your first savings account, your focus may have been on budgeting your monthly income or planning for the savings goals you had in mind. What you may not have thought about is what happens to your accounts and assets after you have passed away. And that’s understandable. It’s never comfortable to think about those who will be managing your affairs when you’re no longer able. Though it’s a tough topic to consider, deciding who will inherit your assets after you’ve passed is an essential part of financial planning – no matter your current financial position or age. 

Read on for more details, benefits and considerations of naming beneficiaries on your financial accounts.

What is a beneficiary?

A beneficiary is a person or entity who is designated to receive your financial assets after you pass away.  Your beneficiary will be entrusted with and entitled to your money. If you have a joint owner on your account, your assets will automatically transfer to the surviving owner. However, if you are the only account owner, then your assets would pass to your beneficiary. Though almost anyone can be named a beneficiary, you should ideally select someone responsible and trustworthy.

What are the benefits of naming beneficiaries? 

  • Guarantee your wishes are followed – Adding a beneficiary to your Credit Union Share Account gives you control regarding how your money will be distributed and allows you to make sure your wishes are honored when you are no longer around. It also gives you peace of mind knowing a plan is in place for your finances when the time comes. 
  • Save time and expense with probate – Even with a valid will, probate proceedings may be unavoidable and expensive. A named beneficiary ensures the individual of your choosing can take ownership of your finances after you’ve died and is able to easily distribute the funds to loved ones as specified in your will. It is important to note that your beneficiary designation will take precedence over what is in your will. That means, when life changes occur, it’s important to reevaluate any beneficiary changes that may also need to be made.
  • Privacy – Probate proceedings are a matter of public record. Anyone could see how much money you left your loved ones and how your assets were ultimately divided. Naming a beneficiary helps ensure your private matters remain private.

How do I add beneficiaries to my account? 

If you didn’t designate a beneficiary when setting up your account, know it’s never too late. Adding or changing beneficiaries is an easy process. Simply give your Credit Union a call or visit your local branch and state you’d like to make your Credit Union Share (Savings) Account a Payable on Death Account. Account access and ownership will remain the same, but you will have the opportunity to add beneficiaries by providing the names and social security numbers of those you would like to inherit your assets. If you name more than one beneficiary, the funds in your savings will be split evenly among the beneficiaries listed.

Naming and maintaining beneficiary designations is a vital part of your financial plan. Not only does placing beneficiaries on your Share Account make transferring money to loved one’s easer, it also ensures that your family has added peace of mind as they navigate a difficult time.

Contact your Credit Union today to make sure you Share Account is set up according to your wishes. Give us a call at 1-800-249-2726 (APCO) or click the Contact Us button below to send us an email.

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