What is a beneficiary designation and how does it work?

A beneficiary designation is a legal document used in estate planning law that allows a person to select who will receive their property upon their death. It is typically used for assets such as life insurance policies, retirement accounts, and bank accounts. The designation, which must be signed by the owner of the property, identifies who will receive the assets upon their death and is binding in most cases. To create the beneficiary designation, the person must decide who the beneficiary of the assets will be. The beneficiaries must be 18 years of age or older. It is important to be sure that the person selected is someone the owner trusts. Once the beneficiaries have been determined, the document must be filled out and signed by the owner with two witnesses. In the state of Maryland, the beneficiary designation must be in writing and signed by the owner of the asset. Once the beneficiary designation is complete, the owner should review it periodically to make sure the named beneficiaries are still the ones they want to receive their assets upon their death. The benefit of a beneficiary designation is that it allows the owner to determine who will receive their assets, bypassing probate court. The named beneficiaries do not have to pay any inheritance taxes on the assets and will receive them quicker than if the assets had to go through probate.

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What is a beneficiary designation and how does it work?

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