The importance of naming beneficiaries on your accounts...

Many people wonder if they should have a trust for their assets as a tool to both avoid probate and direct the assets to beneficiaries of their choosing outside of the will. While a trust certainly accomplishes this goal, it can prove very costly to implement and may not make sense for the average person.

A great way to accomplish the same goal (in most cases) is to maintain up-to-date proper account designations and beneficiary information with the institution you work with. A TOD (transfer on death) designation will automatically pass the assets in said account to the named (or named) beneficiary of your choosing, outside of the probate process. A POD (payable on death) is typically for bank accounts, as opposed to stock accounts, and accomplishes the same goal. If you have retirement accounts, properly naming your beneficiaries in whatever percentage split you would like to is vital as well, which performs virtually the same action as TOD and POD accounts, but in a different manner.

Remember, the probate court process can run 6 months to a year in some cases, costing you time and money. If you want to make sure your heirs get the share of your assets that you intended, in the fastest and most efficient means possible, double check your designations! Also, do not overlook having contingent beneficiaries as the unknown can always occur. Taking care of these small steps can really help you button up your asset distribution upon your passing and avoid unintended consequences of getting around to it later. #tod #pod #beneficiary #financialeducation

Consult your financial professional for more information.

-Your Friends at Red Oak Financial Group