Transfer on Death Beneficiaries for Bank Accounts

When it comes to estate planning, one very simple task that tends to be overlooked by many dentists is setting up transfer on death beneficiaries for your bank accounts. It is possible that preparing your estate plan has been pushed to the bottom of your to-do list, especially if you are running your own dental practice. But, there are a few factors that we would like for you to be aware of regarding your personal assets in the event of a dire situation. You may assume that your spouse will be able to access any funds in your individual bank account immediately upon your death. Unfortunately, if the bank account is only in your name and you have not designated a transfer on death beneficiary, your bank account will need to go through probate. If you have been proactive and had an estate plan prepared for you, one of the estate planning tools that may have been set up for you is a trust. If you have a trust, then it is important to ensure that your trust is listed as a beneficiary of your bank accounts. For checking and savings accounts that you use on a regular basis, including any individual or joint accounts, we recommend keeping those accounts in your name, instead of placing them in your trusts’ name, simply for convenience purposes.

Joint Bank Accounts

If you and your spouse have a joint bank account, we recommend that you follow up with your bank to have the accounts transferable on death to your trust to avoid probate once the second spouse passes away or in the event that you both pass away at the same time.

Individual Bank Accounts

For any bank accounts that are titled in only one spouse’s name, then we encourage you to follow up with your bank and ensure that the account is set up to transfer on death to your trust. Setting up the account to transfer on death will ensure that the account does not have to go through probate and will allow the trustee of your trust to immediately access the funds in that account following your death. Thus, if your spouse is the trustee of your trust, she will be able to access those funds immediately upon your death.  If your spouse is no longer living when you pass away, or if you both pass away at the same time, then the account will transfer to your trust and the successor trustee will administer the funds per the terms of your trust.

Dental Practice Bank Accounts

You should also consider setting up your dental practice’s bank account to transfer to a dental practice trust upon your death, if a trust has been established for your dental practice. We will be discussing dental practice trusts further in a future dental blog.

Setting up transfer on death beneficiaries for bank accounts is a relatively simple process that can potentially alleviate unnecessary stress for your loved ones. If you would like more information on estate planning or would like to discuss preparing your estate plan, please contact our estate planning attorneys at (614) 223-0123.