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Choosing Beneficiaries When Planning Your Estate

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How do you prove you are a beneficiary

Choosing beneficiaries is one of the most important things you can do when planning your estate. This will ensure your wishes are carried out when you die.

The beneficiaries you name can include both individuals and entities, such as charities, trusts, or other nonprofit organizations. They can be the recipients of life insurance policies, retirement accounts, and even money in a trust.

Insurance Policies

Insurance policies are a safety net for people who have financial losses and need financial assistance. Whether they’re in the event of fire, theft, lawsuit or car accident, insurers will help people recover.

When a policyholder passes away, their loved ones can receive the proceeds from a life insurance policy as long as they’re named as the beneficiary. However, it’s not uncommon for a loved one to forget about their beneficiaries or may not have the right contact information for them.

In such cases, it’s important to look through the deceased person’s documents and check their bank accounts. It’s also a good idea to ask their estate planning attorney or financial adviser to see if they had any life insurance policies.

Retirement Accounts

Many retirement accounts allow you to name a beneficiary to receive your account assets upon your death. This is typically a convenient way to ensure that your loved ones can receive your funds immediately after your passing — which may be helpful in paying your final expenses or in receiving life insurance benefits.

If you have a retirement account, it’s important to know how to prove your beneficiary status. Often, this involves contacting the financial institution or custodian where the account is held.

Almost any type of account allows you to designate a beneficiary, including individual retirement accounts (IRAs), life insurance policies and mutual funds. If you do, make sure that you provide as much detail as possible when you fill out the beneficiary designation form.

Bank Accounts

Bank accounts can be a great way to store your money, pay bills online and use payment apps. They also help you track your spending and catch identity theft and fraudulent purchases.

When someone passes away, their money is automatically transferred to the beneficiary they designated on their account. The process can be quick and easy, and it’s a simple way to avoid probate.

Many banks offer a type of payable on death (POD) account, which allows their customers to name a beneficiary. The bank then releases the funds to the named person once it learns of the account holder’s death.

It’s important to update your beneficiary designation whenever there’s a major change in your life. If you die before the designation was updated, your beneficiaries may inherit your account through state Intestacy laws instead of your will.

Trusts

A trust is a legal document that helps you and your beneficiaries control and distribute assets according to your wishes. It’s a way to protect your wealth from creditors and other people who may have a claim against it after you’re gone.

It’s also a great way to ensure that your children or grandchildren can go to college and have enough money for retirement. You can even leave a legacy for charity.

You can place a wide range of assets in a trust, including cash, real estate, stocks, bonds and artwork. These can be moved into a trust in one shot or over time.

You can also choose whether to have a trustee manage your trust or give it to a loved one or trusted relative. Having a good relationship with your beneficiaries can make the trust administration process much easier.

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