It is easy to forget who you have named as beneficiaries on various accounts. Your beneficiaries are the people or charity that receives your money after you die. Your retirement plans and your insurance policies have forms or online ways of checking and updating beneficiaries. A beneficiary can also be named on a bank account, called a POD or pay on death. A non-retirement investment account can also have a beneficiary, called a TOD or transfer on death. Of course, if you hold the account jointly, it is automatically inherited by the joint account holder or if it is owned by a trust, the trust documents suffice.
A little known fact is that you can go to the DMV (Department of Motor Vehicles) and fill out a beneficiary form, so these assets are transferred to a new owner.
These ways of transferring an estate (what you own at death) do not go through the court probate process. In addition, these contracts (TOD, POD, account beneficiaries) and titling assets supersede those named in a will or trust. The contract or titling of the asset comes first. Don’t short change your loved ones because you forgot to change the insurance beneficiary to your second spouse so your ex-spouse inherits (true story). All benefits departments at corporations have similar stories.
To identify or change beneficiaries you will need the name, date of birth, social security number and sometimes their address. If naming a charity, their name and tax identification number is all that is needed. It only takes a few minutes to do this, so go do it now.
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