Posted by Martin Heller Potempa & Sheppard, PLLC on July 20, 2022
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You want to feel confident knowing how your assets will pass to your loved ones after your passing. However, how assets can be passed varies, especially when it comes to your bank accounts. Because of this, you need to ensure you and your loved ones understand how this will be handled in the future. With careful estate planning, you’ll know that your assets, including any bank accounts, are distributed to your beneficiaries the way you wanted.
Learn more about what happens to a person’s bank accounts after they pass away.
When you own a bank account in your own name and no one else’s, there are a few different ways you can plan to distribute assets from the account upon your death. As with most assets, you can pass assets in your bank account to loved ones using a will or trust. However, in some cases, you might be able to name a designated beneficiary with your bank.
Wills and Trusts
You can include your bank account as an asset in your estate that gets distributed according to the instructions in your will. While everyone should have a will, not everyone requires a trust as a part of their estate plans. Placing assets in your bank account into a trust can have many important benefits, including allowing your beneficiary to avoid probate and giving you more control over how these assets are distributed.
Wills and trusts are common ways of distributing all types of assets, but designated beneficiaries are an option for certain policies and accounts, such as life insurance policies and bank accounts. Naming a designated beneficiary with your bank gives them the ability to pass assets from the account directly to the beneficiary upon your death. This can help simplify the process when the bank account is distributed to your beneficiary and get them their inheritance faster.
Married couples often have joint bank accounts in both of their names. In many cases, jointly-owned bank accounts are joint tenants with rights of survivorship. When this is true, after the first owner passes away, the surviving owner receives full ownership of the account. However, not all jointly-owned bank accounts automatically give the right of survivorship, so you need to ensure you know how the account will be passed. It’s not safe to assume your spouse will receive everything in the account with no trouble after you pass, so even if both of your names are on the account, you’ll still need to do some planning.
Bank Accounts with No Beneficiaries
In some cases, a person may have had a bank account they had sole ownership of, didn’t name a designated beneficiary, or write a will or trust. Even if you haven’t stated who you want to receive assets from your bank account, these will still be distributed to family members. When you haven’t named a beneficiary in any of your estate plans, your bank account will be distributed according to Tennessee’s state intestacy laws. Because of this, the loved ones you wanted to benefit from assets in your bank account after your passing might not be the ones who end up getting them.
Talk to an Estate Planning Attorney Today
Your bank account is only one of many assets you have to think about. With so much that needs to go into planning your estate for the future, you don’t want to take any risks doing it alone. With help from an experienced estate planning attorney at Martin Heller Potempa & Sheppard, PLLC, you’ll know that everything you and your beneficiaries needs is taken care of.
Contact our Nashville estate planning attorneys today for help.
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