What Is a Bank Account Beneficiary?

What Is a Bank Account Beneficiary?

When someone who has a bank account dies, the beneficiary automatically receives the assets, according to the Wall Street Journal. Naming a bank account beneficiary is an option offered by some financial institutions.

When a beneficiary is identified for a bank account, the money does not go into probate as part of the decedent's will, the Wall Street Journal states. Bank account holders are allowed to name many types of entities as beneficiaries, including their estates, individuals, trusts, charities and other organizations. However, a beneficiary does not have to be named.

If minors are designated as beneficiaries, the courts appoint someone to oversee the money, and this often becomes expensive, warns the WSJ. In addition, government benefits to people with disabilities are sometimes affected if they are beneficiaries.