As an adult, a significant part of managing your finances is preparing for the future. In the short term, that may include putting money aside in an emergency fund for unplanned expenses. Long-term, actively saving in retirement accounts helps to ensure you’ll be ready for your golden years. Some people overlook naming a beneficiary. You should do this no matter what age you are.
Providing financial security for yourself and your family likely ranks at the top of your financial goals. While it isn’t something you prefer to think about, you should decide what will happen to the money in your accounts should you unexpectedly pass away. It’s vital to your financial plan.
Creating a will, estate planning, and maintaining a life insurance policy are all wise financial moves. However, there is a very simple way to ensure your funds pass directly to your loved ones. It’s called a beneficiary.
What is an Account Beneficiary?
When you open a bank account or enroll in a life insurance policy, they’ll ask you to designate an account beneficiary or beneficiaries. Typically, this is an individual, such as a spouse or child. In some circumstances, you can select an organization, such as a charity.
Should you pass away unexpectedly, your beneficiary (or beneficiaries) will be able to access the funds in your account immediately.
Why Should You Have an Account Beneficiary?
You may ask yourself why you need a beneficiary if you already have a will. When you pass away, the process can become lengthy and complicated. If you do not have an account beneficiary listed, your accounts could enter probate.
Probate is a court process that seeks to organize and distribute a person’s assets once they pass away. It also involves creditors and anyone else designated in a will. The procedure can be extensive and ultimately ties up your money instead of it being distributed accordingly.
With a beneficiary listed on your account, your funds will skip probate. Instead, your beneficiary will be able to access your money immediately. It only takes a few minutes to designate a beneficiary on your account and provide additional financial security for your loved ones.
How to Set Up or Update Your Beneficiaries
It’s easy to assign or update an account beneficiary within your financial accounts. To set or update your beneficiaries, you can:
- Call (315) 671-4000
- Text (315) 671-4000
- Email [email protected] (DO NOT include sensitive information such as SSN, DOB, or account numbers)
- Chat with a member of our team
You’ll want to review your beneficiaries at least once per year to ensure you listed the right people.
Reasons You May Want to Change Your Beneficiaries
Once you assign a beneficiary, you can easily change them if you need to. A few reasons you may want to change the beneficiaries you have designated on your account are:
- You’re recently married
- You had children or adopted a child
- You got divorced
- There was a death in the family
Although nobody likes to think about their passing, take time to add beneficiaries to all your financial accounts. It’s a very simple task but vitally important. Knowing your loved ones will be taken care of should something happen to you unexpectedly will give you some peace of mind.
Review your account beneficiary every year to keep them up to date.
We’re Here to Help!
If you would like to review the beneficiaries listed on your account, or you want to add or update individuals, we’re happy to help. The process should only take a few minutes to complete.
Call, chat, text, or stop in – we’re here to help Monday-Friday 9am-4pm ET.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.