I am partnered, and have no children. The house is in both our names and all our investment accounts are payable on death to each other. But I’d also like to list a few charities as beneficiaries or second beneficiaries. Can charitable organizations be listed as beneficiaries on investment accounts? Do I need an executor, or will my investment organizations handle the payouts? Is a simple will enough, or should I have a trust? If my partner should predecease me or we perish together what contingency plans should we have in place?
From what you say, all you need is a simple will for assets without designated beneficiaries that you own in your sole name, like your car, household goods, and collectibles.
Assets that you own jointly with right of survivorship (like your house), or on which you’ve named beneficiaries (like IRAs and 401(k) accounts, and non-retirement accounts that are payable on death or “in trust for” a beneficiary) aren’t handled by an executor or trustee because their disposition isn’t determined by a will or a trust. It’s determined by how the asset is titled or by its beneficiary designation form.
These assets pass to the surviving joint owner or the named beneficiary on presentation of your death certificate.
You can name a charity either as a primary beneficiary or a contingent beneficiary. Contingent beneficiaries only inherit if there are no surviving primary beneficiaries. You should choose the people and/or organizations you want your accounts to go to if you and your partner die in a common accident.
Always specify the percentage of the account each primary and contingent beneficiary is to receive. For example, primary beneficiaries: John Smith (80 percent) and Mary Smith (20 percent); contingent beneficiaries XYZ Charity (50 percent) and ABC Charity (50 percent).
THE BOTTOM LINE Financial accounts with designated beneficiaries bypass your will.
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