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Naming your beneficiaries

April 14, 2020

By Katie Pins

It’s not a fun subject, but naming beneficiaries for all of your financial accounts can be a way to ease the emotional and financial burden on your loved ones when you pass away. If you do it incorrectly though, it can cause delays and pain for your family. Here are some tips on how to ensure that your family is set after you’re gone.

Name your beneficiaries

No matter your age, it’s important to name beneficiaries on your asset accounts. These accounts include:

  • retirement accounts like a 401k or IRA
  • life insurance policies
  • annuities
  • deposit accounts like savings, checking or certificate accounts
  • investment accounts such as stocks, bonds or mutual funds

Naming your beneficiaries can be easy, and generally only requires you to provide the beneficiaries’ names, addresses, and relationship to you; some banks require social security numbers, but that information is often optional. And you can name secondary beneficiaries as well, in case one of your primary beneficiaries dies before you.

If you’re unsure of where to get started, write out your asset accounts and then go through the list. It can be helpful to hold on to that list in case you ever need to update it – just don’t have any personal information like account numbers or social security numbers on the list.

Why you need beneficiaries

Some people don’t realize that they need to set up beneficiaries. They think that if they’re married, their funds will go to their spouse automatically or to their children automatically if that’s what’s in their will. However, even if you have a will or are married, it’s important to name your beneficiaries. Named beneficiaries can get their funds right away – generally, the estate just has to provide a copy of the death certificate to the bank or stock broker for accounts to be transferred to the named beneficiaries.

If you don’t have named beneficiaries, the money in your accounts will go to your estate, but that means the people who inherit the money won’t get it until your estate is settled, which can take months or years, depending on how complicated or straightforward your estate is. And having to go through probate means your estate will have to pay court fees.

Double-check the info

If you leave out or provide misinformation when you name your beneficiaries, you can cause a lot of headaches for your family. This is especially true if you have people in your family with similar names.

You want to be clear about your wishes to prevent any bad blood or delayed payouts. Simple routine checks of social security numbers and names can go a long way.

Plan for Updates

As names or circumstances change, update your beneficiaries as well. Life events (such as marriage, divorce, name changes, births and deaths) are when you want to update your beneficiaries. If it’s been a while since a big family event, it’s still helpful to check up on your accounts every couple years.


Katie Pins is a marketer fascinated with finance. Whether the topic is about the psychology of money, investment strategies or simply how to spend better, Katie enjoys diving in and sharing all the details with family, friends and Money Mentor readers. Money management needs to be simplified and Katie hopes she accomplishes that for our readers. The saying goes, "Knowledge is Power", and she hopes you feel empowered after reading Money Mentor.

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