As an adult, a significant portion of managing your finances is preparing for the future. In the short term, that may include putting money aside in an emergency fund for unplanned expenses. Long-term, actively saving in retirement accounts helps to ensure you’ll be ready for your golden years.
Providing financial security for yourself and your family likely ranks at the top of your financial goals. While it isn’t something you prefer to think about, deciding what will happen to the money in your accounts should you unexpectedly pass away is vital to your financial plan.
Creating a will, estate planning, and maintaining a life insurance policy are all wise financial moves. However, there is a very simple way to ensure your funds pass directly to your loved ones. It’s a beneficiary.
What is a Beneficiary?
When you open a financial account or enroll in a life insurance policy, you will need to designate a beneficiary or beneficiaries. Typically, this is an individual, such as your spouse or your child. In some circumstances, you can select an organization, such as a charity.
Should you pass away unexpectedly, your beneficiary (or beneficiaries) will be able to access the funds in your account immediately.
Why Should You Have a Beneficiary?
You may ask yourself why you need a beneficiary if you already have a will. When you pass away, the process can become lengthy and complicated. If your beneficiaries are not listed, your accounts could enter what is known as probate.
Probate is a court process that seeks to organize and distribute a person’s assets once they pass away. It also involves creditors and anyone else designated in a will.
With a beneficiary listed on your account, your funds will bypass probate. Instead, your beneficiary will be able to access your accounts immediately. It only takes a few minutes to designate a beneficiary on your account and will provide additional financial security for your loved ones.
How to Set Up or Update Your Beneficiaries
It’s easy to assign or update a beneficiary within your financial accounts. To set or update your beneficiaries, you can:
- Call the credit union directly.
- Stop by one of our branch locations.
Once you have your beneficiaries assigned to your account, you’ll need to review them at least once per year to ensure that the right people are listed.
Reasons You May Want to Change Your Beneficiaries
Once you assign a beneficiary, you can easily change them if the need arises. A few reasons why you may want to change the beneficiaries you have designated on your account are:
- You’ve recently married.
- You have children or adopted a child.
- You got a divorce.
- There was a death in the family.
Although nobody likes to think about their passing, taking time to add beneficiaries to all of your financial accounts is very important. It will give you peace of mind knowing your loved ones will be taken care of should something happen to you unexpectedly.
We encourage you to review your beneficiaries at least once a year to ensure the right individuals are assigned to your account.
We’re Here to Help!
If you would like to review the beneficiaries listed on your account, or you want to add or update individuals, we’re happy to help. The process should only take a few minutes to complete.
To get started, contact us or stop by any of our convenient branch locations today.
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Each individual’s financial situation is unique. Please contact United Texas Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.