Beneficiaries help those you love

Odie Otterstrom |

If you’ve met with us, you know we are going to ask you regularly, who you want as beneficiaries. And every financial enterprise should do the same. Your bank, your insurance policies, your assets, portfolios, etc. This is not because they want the latest scoop on your personal life. In fact, they are required to keep your information confidential.

And we know no one likes to talk about dying, but we promise you that thinking clearly now about what you want to happen for the people you love when you do eventually die, will make living that much sweeter!

So let us help you answer some of the questions you might have about beneficiaries.


What are beneficiaries?

A beneficiary is the person(s) you want your resources to go to upon your death. These people do not need to know that they are marked as your beneficiary, though they (and not to mention your financial advisor) would appreciate it if you give them the heads up, since no one likes to get surprised especially when they are dealing with grief. This can be for those items listed above, like your bank account, your insurance payouts, your retirement accounts with employers (past or present) and any other financial account. And while most people will transfer accounts to the same person or people, some situations or personal preference may have you split this among friends or family, or even charities, though it makes keeping track of everything complicated, and makes where bills for your estate land, more complicated, which is why most people will advise you keep your beneficiaries consistent across accounts and with your will and trusts. Beneficiaries can be one person, or multiple. A contingent beneficiary is moved up if the primary beneficiary is deceased.

Beneficiaries DO NOT have access to your account. They do not know the details of your account, what’s included and what’s not, and who else you might have listed. They also do not receive any information from the entities where the accounts are held. They do not have access to your dashboard or any online access. And finally, they have zero ability to change or transfer anything without a valid death certificate with your name and information.


Why do we appoint beneficiaries?

We appoint beneficiaries to avoid probate and delays in transfer of resources. Most financial entities, including your financial advisor will do their level best to stay in touch with you. If we cannot reach you, we contact your trusted contact, and if not, most organizations will also check recent death records to make sure you haven’t yet passed away. This allows your family or beneficiary access to resources that might be needed to avoid hardship on their part in any costs with your passing or ongoing maintenance of property, pets or minor children.


What will be expected of my beneficiary?

If during the course of business, we discover your death has occurred, or a family member notifies us of your passing, we start the process of notifying beneficiaries privately. With a death certificate on file, we can start those processes with the various accounts you may have held with us. Your beneficiary would also be encouraged to start estate management, with your appointed attorney or with their own if they are unsure who you worked with. They will also need additional copies of the death certificate for any additional accounts (most institutions will require an original copy).

If you ever find yourself as a beneficiary, know that we can help you with this process. Please know that we want to be here for you in this time of need and will answer as many questions as we can for you when you are ready.


What happens if we don’t have beneficiaries?

If you choose to leave your beneficiary blank, your account can move forward, but the government will take over at the time of your death. Any accounts without beneficiaries listed go into the probate process, which is a judicial process, wherein lawyers and the courts determine who is most appropriate to inherit any positive values remaining. Most states use family lineage to determine next in line. And you can bet this process can take months or years to complete.

Without a will, your estate will pass to the state courts who will then decide where your assets will go. This process is time consuming and exhausting for surviving family members. But if you create a will NOW (please don’t put this off), you can choose who receives a wide variety of assets, and you can name friends, family, neighbors, a friendly stranger, a trust or a charity for any assets that remain.

Avoiding probate helps your beneficiary and family access funds faster for any immediate costs, such as health, current bills, funeral costs, caring for pets, or a property, or other memorial items they may want to cover with your assets.


What if my beneficiaries are incorrect?

If someone is listed as a beneficiary and upon your death you didn’t intend them to receive the proceeds, they will receive them anyways. This is often the case for individuals who have gotten divorced or estranged from close family members.

Even if we as your advisor know that you are divorced and never intended your ex-spouse to receive the funds, if you don’t change the beneficiary with us and any other company necessary, they may still receive your funds.


Help, I don’t even know where to start!

Never fear, this is what your financial advisor is for. We are here to help you manage your accounts and we will help you create a list of all other accounts that should be reviewed. Call us today.