Beneficiary Designations in Cranberry Township Estate Planning

A beneficiary is a person you list on your accounts at financial institutions to pay upon your death. People often list their spouses, children, or even grandchildren. When assets are passed on to the beneficiaries named on accounts, they are not subject to probate.

When someone passes away and fails to name beneficiaries, the funds must first go through the probate process before going to the estate heirs. Speak to a lawyer experienced with beneficiary designation in Cranberry Township Estate planning to learn more. One of our estate planning attorneys could help you figure out the process and better understand your needs.

What are Beneficiaries?

Beneficiaries are the individuals’ names to inherit assets held in a bank, life insurance, retirement, and other accounts when they pass away. The money will transfer to them or an estate if the person chooses to do so.

An example would be creating a trust that the money transfers to and is then disbursed to the individual’s heirs. When people die with no beneficiaries on their asset accounts or the parties have not been updated after deaths and other life-changing events, the funds must go through probate, and the court will distribute the estate property to the deceased person’s family.

Various Types of Accounts

There are several different types of financial accounts and other assets that allow beneficiary designations. Different types of accounts include:

  • Annuities
  • Savings bonds
  • Certificates of deposit
  • 401(k) retirement plans
  • Life insurance policies
  • Retirement accounts of various types
  • Check and savings bank and investment accounts

The accounts may be owned in one individual’s name or jointly by two or more parties.

Helpful Tips

Some helpful tips for choosing your beneficiaries and completing the paperwork include:

  • Always remember to name your beneficiaries on all financial accounts
  • Name both primary and contingent beneficiaries in the event that the primary passes away
  • Update all of your accounts after significant life events, such as marriage, divorce, and the birth of a child
  • Coordinate with estate planning documents, such as a will and trusts
  • Consult an accountant or other professional when naming a trust as a beneficiary
  • Read the instructions thoroughly to ensure you complete the form correctly
  • Understand the federal tax implications

An attorney skilled in designating beneficiaries in Cranberry Township estate plans could help you with all your legal needs.

Internal Revenue Service-Retirement Topics

Beneficiaries on an individual retirement account (IRA) are subject to taxes upon the account owner’s death. According to the information provided by the Internal Revenue Service (IRS), beneficiaries may take a lump-sum payment of the money in accounts at any time. They must include their inheritance on their tax form as taxable income.

Account owners must ensure they follow the account instructions for beneficiary designations to avoid problems under the terms of the plans. The amount of taxes and how the IRS assesses them depends on the type of retirement account. A lawyer skilled with Cranberry Township beneficiary designations in estate planning could review your documentation to ensure compliance with the law.

Call an Attorney Skilled in Designating Beneficiaries in Cranberry Township Estate Plans

The beneficiary designation process can vary depending on the type and terms of each financial account. They are the people you select to inherit your assets from banking, retirement, and life insurance accounts upon death.

When people die without naming beneficiaries, the assets must go through probate and then pass to your closest relatives. Speak with a hard-working lawyer seasoned with beneficiary designations in Cranberry Township estate planning for more information.