What If Account has No Named Beneficiary?
It’s not uncommon for a person to have a banking, retirement, or other investment account with no designated beneficiary when they pass away.
Beneficiaries can include spouses, children, other family members, friends and charities. Beneficiary designations can generally be added to assets, such as bank accounts, securities accounts, retirement accounts, life insurance policies, savings bonds and a number of other assets. Designating a beneficiary will determine how an asset is distributed at the owner’s death– regardless of the provisions of the person’s will or trust.
The first step is to probate the will of a deceased, assuming she had one, says nj.com’s recent article entitled “My wife died and her account has no beneficiary. What’s next?”
When a person dies without a surviving beneficiary – if the account has not named beneficiary – the assets go to that person’s estate. So, if a person left a will, the assets in the banking account would pass to the beneficiaries under that will.
If the decedent had no will, the beneficiaries would be dictated by the laws of the state in which the decedent resided. These are known as intestacy laws, and they describe who inherits if there’s no will. In Louisiana, the persons who will inherit if there is no beneficiary are the heirs at law if the person didn’t have a will, or if they did have a will, the legatees.
If an account has no named benficiary, an estate may have to go through the probate process before the decedent’s assets can be transferred to the will’s beneficiaries. It may depend on the size of the decedent’s estate. In Louisiana, we have a procedure known as an Affidaivt of Small Succession. However, many banks and insurance companies – effectively – don’t recognize the the Affidavit of Small Succession procedure. So if your account has no named beneficiary, and your succession is a small succession, your succession may still have to go through probate. A few banks and insurance companies may recognize the procedure, but it is usually when the amounts in question are small, and they tend to do so on a case-by-case basis.
If you liked this article, “What If Account has No Named Beneficiary?”, read these articles: What Is the Benefit of a Roth IRA at the Time of Retirement? and Affidavit of Small Succession in Louisiana and Can I Keep Assets and Still Be Eligible for Medicaid? and When Should an Estate Plan Be Reviewed?
BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about esate planning and asset protection.
Reference: nj.com (Oct. 22, 2021) “My wife died and her account has no beneficiary. What’s next?”
