Home » Death & Financial Affairs

Simple Estate Planning for Bank Related Items

Like Benjamin Franklin said – the only thing certain in life is death and taxes. No one wants to think about end-of-life planning but the unfortunate reality is that death will happen to us all.  One of the most helpful things you can do right now is to get your financial affairs in order so that when you do pass away, your loved ones don’t have to worry about what to do with all your assets.

Here are a couple of the most important steps you can take to help your friends and family out.

1.    You should put a simple Will together.  This will provide your loved ones with clarity for your wishes in regards to your valuables left behind.

2.    You should name Beneficiaries to your more valuable assets, such as:  bank accounts, real estate, safety deposit boxes, etc.  Named Beneficiaries let the court or bank know who to turn the assets over to upon your death.  This helps your loved ones avoid a lengthy, costly process in probate court where the court will decide how to divide up your assets.

a.    Bank Accounts – you can easily name a beneficiary to your bank accounts by stopping by the bank and filling out the proper beneficiary form.

Naming a beneficiary does not grant the beneficiary access to any of the funds or services associated with the account while you are still alive.

If you choose, you can designate multiple primary beneficiaries and secondary beneficiaries on the same account by noting the percentage of the account balance each beneficiary is entitled to receive upon your death.

This avoids the court process and the beneficiaries simply need to provide a death certificate and a valid photo id to access the funds.

b.    Real Estate Assets (house/land) – As with your bank accounts, it is recommended to name a Beneficiary to any owned real estate to avoid the lengthy and costly probate court process.  For this you need to have a Beneficiary Deed, this is a type of real estate deed that will allow your real estate interests to transfer over to your named beneficiaries upon your death.  The document must be recorded with the local County Recorder of Deeds office where the property is located.

The beneficiaries do not have any legal rights to the property until your death.

You may record a Beneficiary Deed even if your property has a lien on it but be aware that if you pass away before the loan is paid off, those payments may be assumed by your beneficiaries.  In this case, your beneficiaries may also have to qualify for a new loan in order to keep the property.

c.    Safety Deposit Boxes – it is also important to designate a beneficiary to your safety deposit box located at the bank.  If no one is named, no one will have access to the contents of the box and the bank will have to get a court order to get it opened.  If this happens the court will also decide who the contents will go to.  Again, this process could be lengthy and costly to your loved ones.