Individuals may help their heirs avoid probate by naming them as beneficiaries on certain accounts. As noted by Bankrate.com, several types of accounts provide money to beneficiaries as soon as the original account holder dies. Financial institutions generally refer to these accounts as payable on death or transfer on death accounts.
Many checking, savings or retirement accounts allow POD or TOD beneficiaries. Some stock brokerage firms also provide the option to name a transfer on death beneficiary. The named individual takes ownership of any remaining securities when an account owner dies.
Some reasons to add beneficiaries
As reported by Florida Today, keeping accounts updated often includes giving consideration to the beneficiaries named. Florida residents could choose to name their heirs in a will, but POD and TOD account beneficiaries may bypass probate. An individual could also name a charitable organization as an account beneficiary.
If a spouse or certain heirs, for example, contest a will during probate, naming account beneficiaries could help prevent a court battle. By law, the companies servicing the account may only transfer assets to the named POD or TOD individual. The account owner could also update or change beneficiaries as often as necessary.
How the process may begin
By contacting a bank, credit union or stock brokerage firm, individuals may confirm whether the institution offers an option to add beneficiaries. To claim assets, a beneficiary must supply a death certificate and proof that an account owner added his or her name as its POD or TOD recipient.
Florida residents may help their spouses and heirs avoid going through a lengthy probate procedure by naming beneficiaries on certain accounts. The information provided to financial institutions generally overrides a will and provides beneficiaries with assets upon the owner’s death.