Complex and lesser-known legal topics broken down into straightforward insights to help Texans better understand their rights and options.
Designate a bank account beneficiary to avoid the probate process
When you open a bank account, the first thing on your mind is likely not what happens to that account in the event of your death. Legally, you’re not required to name a beneficiary on your bank account, but you may want to do so for a number of reasons.
The main reason you might choose to name a beneficiary on your bank account is to make the probate process easier on your family. It allows the funds in your account to pass directly to the person of your choosing when you die, without requiring your beneficiary to go to court first for approval.
So, how do you name a beneficiary on a bank account?
Determine your beneficiary
The first step is to determine your beneficiary. There is no limit on the number of beneficiaries you may list on an account. When the last account owner dies, the institution will divide the remaining balance between the beneficiaries listed.
Who can be a beneficiary?
The account holder can name a family member or a friend to the account, as well as a business, charity, trust, or an estate. You may also list contingent beneficiaries in the event that the primary beneficiaries die before the account holder.
Obtain a payable on death (POD) beneficiary form from your bank or financial institution
The first step is to contact your bank or credit union and obtain a payable on death (POD) beneficiary form from your bank or financial institution. You will need to fill out one form for each beneficiary, which will include the beneficiary’s contact information and social security number. Visit your financial institution’s website to learn more details about how the process works.
