Designating a Beneficiary for your Investment Account

Are you familiar with the term beneficiary? Most of us have heard this term and know it might have something to do with life insurance, but is that enough? If you want to ensure your assets go where you want them to go, it is essential to understand what a beneficiary is and why you may want to consider naming a beneficiary for all your financial accounts. Why? By naming beneficiaries, you can pass on the fruits of your labor in a timely, cost-effective manner, according to your wishes. When it comes to your investments, planning ahead is vital. Here are the basics of why beneficiaries are critical for building and maintaining financial security for you and your family.

Who Can Be a Beneficiary?

When naming a beneficiary for your investment account, you have several options. You can designate anyone, including family members, friends, and charitable organizations, as beneficiaries. It’s also possible to choose multiple beneficiaries if you wish (at Beanstox, you may select up to 4 different beneficiaries). One important thing to remember is that your beneficiaries must be clearly identified for them to receive the money when the time comes.

Benefits of Naming a Beneficiary

1. Peace of Mind
One of the primary reasons to designate a beneficiary for your investment account is peace of mind. Knowing that your assets will be distributed according to your wishes can provide you with great comfort and allow you to enjoy your life with fewer worries.
2. Avoid Probate
Another reason to designate a beneficiary for your investment account is to avoid probate. Probate is the legal process through which a person’s assets are distributed after death. If you do not have a beneficiary designated, those assets will likely go through probate, which can be lengthy and expensive.
3. Ensure Your Assets Go Where You Want Them to Go
Designating a beneficiary for your investment account will also ensure that your assets go to your designated beneficiaries rather than being distributed according to the laws of intestacy. Intestacy is the legal term for when a person dies without a will or other estate planning documents in place. In most states, if you die intestate, your assets will be distributed according to a strict set of rules, which may not reflect your wishes.
4. Avoid Conflict
Finally, designating a beneficiary for your investment account can help to avoid conflict among your loved ones. If you have not selected a beneficiary, your loved ones may disagree about who should receive your assets, which can lead to tension and conflict. Designating a beneficiary ahead of time may help to avoid these problems.

How To Name a Beneficiary

Designating a beneficiary for your investment account is simple. Generally, all it requires is filling out paperwork with the financial institution where your funds are held and making sure that the designated beneficiary is clearly identified on that paperwork.

Beanstox makes it easy to assign beneficiaries.

Just follow these steps in the App:
1. Tap Settings > Beneficiaries.
2. Tap Add Beneficiaries.
3. Add up to 4 Beneficiaries by entering their:

  • First Name
  • Last Name
  • Email
  • Phone Number
  • Date of Birth

4. Tap the “0” next to your Beneficiary’s name and input their benefit percentage.  If more than one Beneficiary, make sure the numbers sum up to 100%.
5. Tap Confirm.

Take a moment…

Naming a beneficiary for your investment account can save time and money down the road if something were ever to happen to you unexpectedly. It ensures your funds are distributed according to your wishes and allows them to be accessed quickly by avoiding any complicated proceedings afterward. Just a few minutes of your time can make a world of difference.

Subscribe to Our Blog

Share your email address with us so we can alert you when a new blog post is published. Keep an eye out for personal finance tips, invitations to live events, and more to help you build a bright financial future.

NEW 2023 - Subscribe to Our Blog - Individual article page