Contributed by cPort Credit Union
The last thing many people want to do is think about the end of their lives. However, most people do want to help make the lives of family members easier, if they can. Taking some simple steps regarding bank accounts will ease the handling of an estate for surviving family members or other beneficiaries.
A bank account holder can designate beneficiaries. These are most often loved ones of the deceased, such as a family member, but a beneficiary can be any specific person or persons. A beneficiary also can be an entity, such as a charitable organization. Account holders can divide funds into percentages for distribution among beneficiaries. People or charities listed as beneficiaries only need to show proof of identification for the funds to be transferred to their accounts. This transaction will never be able to take place while an account holder is still alive.
Another option is to have a joint account with someone else. Then if one of the account holders should die, the other simply takes over the account and all the funds that were once shared now belong to that person. Usually, these accounts are for individuals and a family member or business partner. Each account holder has total access and control over all the money in the joint account. Joint accounts can have some drawbacks. Either account holder can withdraw any or all of the money. For this reason, people need to be very careful about someone with whom they share an account. By contrast, adding beneficiaries to an account only grants access to funds after the account holder has died.
If bank account holders die without having set up a joint account or listing any beneficiaries, financial institutions don’t know what to do with the funds. Any person or organization seeking to withdraw money or close a deceased person’s account will have to provide legal documentation. This requirement could involve visiting probate court to become the personal representative of the deceased’s estate and possibly working with an attorney.
To add beneficiaries or joint account holders to a bank account takes a small amount of effort. Take the steps now to organize. It is easy and provides peace of mind.