Setting up beneficiaries for your accounts is a core part of estate planning and can ensure your assets are distributed quickly and according to your wishes, often bypassing the time-consuming and costly process of probate.

The general rule is that any account that allows you to name a beneficiary should have one. These designations typically override instructions in your will.

Here are the main categories of accounts where you should consider setting up or reviewing beneficiaries.

1. Retirement Accounts

These are perhaps the most critical because your beneficiary designation controls the distribution and can have significant tax implications for your heirs.

• 401(k), 403(b), and other Employer-Sponsored Plans: Federal law often requires your spouse to be the primary beneficiary unless they sign a written waiver.
• Individual Retirement Accounts (IRAs): Includes Traditional, Roth, SEP, and SIMPLE IRAs.
• Annuities and Pensions

2. Insurance and Health Savings Accounts

• Life Insurance Policies: Both term and whole life policies (including those provided by an employer).
• Annuities: Financial contracts often used for retirement.
• Health Savings Accounts (HSAs): These accounts can pass on to your heirs and have specific tax benefits.

3. Bank and Brokerage Accounts

Many institutions allow you to add a beneficiary designation to these accounts, which is often referred to as Transfer on Death (TOD) or Payable on Death (POD).

• Bank Accounts (POD): Checking accounts, savings accounts, and Certificates of Deposit (CDs).
• Brokerage/Investment Accounts (TOD): Accounts holding stocks, bonds, mutual funds, ETFs, etc.

Set – and Check – Your Beneficiaries

Review your beneficiaries regularly! Life events such as marriage, divorce, the birth of a child or grandchild, or the death of a loved one mean your designations may need to be updated.

A beneficiary designation generally overrides your will, so it’s essential that your designations are up-to-date and consistent with your overall estate plan.