DAL Law Firm: banks and beneficiary designations in Estate Planning
When you are creating an estate plan, beneficiary designations on bank accounts are one of the most important details to review, and sometimes one of the most commonly overlooked. These designations play a powerful role in determining where your money goes after you pass away.
Many bank accounts allow you to name a beneficiary, also called a payable on death beneficiary. When properly set up, these accounts pass directly to the named person after your death without going through probate. This can be a helpful planning tool, but only if the designation is consistent with your overall estate plan.
Problems arise when beneficiary designations are outdated or inconsistent. Life changes such as marriage, divorce, new children, or the death of a previously named beneficiary can all create unintended results. For example, if you name one child as a beneficiary years ago but later update your Will to divide everything equally among your children, the beneficiary designation on the bank account will still control that account.
Another common issue is naming minor children directly as beneficiaries. While this may seem logical, it often creates complications because minors cannot legally manage inherited funds. Without proper planning, the court may need to step in to appoint a guardian to manage the money until the child reaches adulthood.
As part of a thoughtful estate plan, bank beneficiary designations should be reviewed alongside your Will, trust, and powers of attorney. When everything works together, beneficiary designations can help simplify administration and ensure your wishes are carried out as intended.
If you are updating your estate plan or have not reviewed your bank accounts in years, it may be time to take a closer look at how those beneficiary designations fit into your bigger picture.
If you need assistance with your estate plan, contact us to schedule your consultation today! Visit us online at www.dallawfirm.com or check out our YouTube channel for more discussions about estate planning and probate: https://www.youtube.com/@dallawfirm
Need some help to complete your estate plan in 2026? Here’s a recent video of our attorney discussing that very topic:
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Normandy Park, WA 98148T (206) 408-8158
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