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Deciding who should receive your financial assets once you die can be unnerving. But it’s also really important.

Failing to select a beneficiary for your bank and investment accounts as well as retirement plans can spell bad news for your family members, as they might have to go through a lengthy and potentially expensive legal process to determine where your money should go.

To help you avoid that scenario, here’s a closer look at the accounts for which you’ll need to select a beneficiary, as well as what that means.


Most financial institutions offer payable-on-death, or POD, arrangements. Customers select one or more beneficiaries for these accounts, which can include both simple checking and savings accounts as well as savings certificates. Designated individuals will be given your money after you die.

It usually doesn’t cost anything to set up a POD arrangement. Simply reach out to your financial institution and specify whom you want to set as your beneficiary. Although there will be some paperwork involved, it should be a relatively quick and painless process.


If you own stocks, bonds, mutual funds or other securities, you can designate one or more beneficiaries via a transfer-on-death, or TOD, registration. Beneficiaries become the owners of the investments after you die. In most cases, they’ll have to register these assets in their own names after receiving them.

To set this up, provide the owner of your investment account with information such as your beneficiary’s name, address, date of birth and taxpayer identification number.


Whether you’re enrolled in a 401(k) contributory retirement plan or have an individual retirement account, or IRA, you’re typically asked to name a beneficiary as soon as the account is opened. If you’re married, your spouse automatically becomes the beneficiary of your 401(k) unless he or she provides written consent to be replaced by another person. This rule doesn’t apply to IRAs.

Still, designating your spouse as your plan’s beneficiary may end up being your best move, as that provides the option of rolling over funds from your account into your spouse’s. This also should minimize the tax burden on your spouse.


Life insurance is an excellent tool that ensures that your family is taken care of should you die. Although your husband or wife may be your obvious choice when it comes to selecting a beneficiary, know that you can select more than one person. However, when naming children under the age of 18 as beneficiaries, you’ll either need to select someone to manage those funds for them until they’re old enough to do so themselves or establish a trust.


Designating beneficiaries for your various financial accounts ensures that your assets and money go where you want them to after you die. Although selecting beneficiaries is a very personal decision, you’ll probably end up choosing those closest to you: a spouse, children, siblings and perhaps even parents. Regardless of whom you choose, make it a priority to start this process as soon as possible.

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