Simple Ways to Utilize Your Local Bank To Distribute Your Assets

Corey Lederman on October 14, 2015

Life is full of surprises. It’s never too soon to start thinking about the future, and more precisely, how your family will be taken care of. There are many ways to transfer assets when you die, some more involved than others. Luckily, many of our local banks make it very easy to take care of transferring the contents of basic bank accounts.

If you die intestate, that is-without a will, your assets will be divided in accordance with the state laws of intestacy. This is a cumbersome and time-consuming process, and best avoided, if possible. A will and/or trust are great things to have. They come with many benefits and ensure that your property goes exactly where you want it to. However, wills have to be probated (have to be proven valid and claims against the estate paid) before beneficiaries are allowed to collect any property with their name on it. Also, sometimes wills are disputed, which makes the process exponentially longer.

Thankfully, there are some simple things you can do down at your local bank to make sure your money immediately goes exactly where you want it to in the event of your death.


“Transfer of Death” or “Pay on Death” are designations you can opt to have on your bank accounts which will transfer the contents of the account to the person(s) of your choosing upon your death. This is an attractive option because it avoids the probate process entirely.

Banks differ in the steps needed to make such a designation, but it is usually quite easy. For some banks, you need only provide the basic contact information for a beneficiary (name, address, phone number), social security number, and have their signature notarized. And you are generally not limited to one beneficiary either.

For many, Transfer on Death or Pay on Death accounts are a sensible and cheap way to have their accounts dispersed. Adding these designations has zero effect on the contents of an account until the death of the account holder. Thus, the beneficiaries are not “owners” of the account and can’t just withdraw money at any time. It’s only effective once the account owner dies. And the designations can be changed or revoked at any time, without the consent of the beneficiary.

However, it’s important to note that these bank designations are considered will substitutes that act independently from the wishes contained in a will. This means that if you later decide to will the money in your bank account to Sheila, but the bank designation says it goes to Sharon, it will go to Sharon. Thus, you must always remember to update your designations should you later change your mind.


Joint bank accounts are often misunderstood, even by bankers. Joint bank accounts can be a convenient way of sharing money with another person. However, beware: every time you make a deposit, you are making a gift of 50% of that deposit to the other person “on” the account. Also, while each person (on a two-person account) is legally entitled to half of the account, most bankers will not stop them from clearing the account and heading to Hawaii.

Joint bank accounts are generally with a “right of survivorship,” which means that when one party dies, the other party is entitled to 100% of the account (irrespective of whatever a will might say).

Another subsection of joint accounts are “Convenience Accounts,” which are a little bit different. These are accounts that you might, for example, set up for your child when they go away to college or if you would like someone to help you pay your bills. With these, whomever you choose can take money out of the account, but the money is all legally yours. The deposits are 100% the depositors. Additionally, any creditors of the other party on the account cannot lay claim to the account.


Another more involved way of preserving and protecting assets is by creating an irrevocable trust. There are many reasons to make a trust: asset protection, estate tax planning, asset management, avoiding probate, and many others.

An irrevocable trust will also protect against forced liquidation, which for instance could occur if later in life your medical bills outweigh your liquid assets. The property in a trust will remain protected, as it is not legally yours anymore. Likewise, a trust will preserve your assets against creditors, ensuring that the assets are maintained to be distributed to your family.


Custodial accounts are a tool for putting away money for the exclusive use of a minor. These can also generally be set up as simply as the Transfer on Death or Pay on Death accounts discussed above and can be a way to grow a nest egg for your child until s/he become an adult.

These are useful to save up for large ticket items down the road, such as post college-graduation expenses or the down payment on a house. Keep in mind that minors reach the age of majority in New York with respect to these accounts at age 21, by default. So at that point, the nest egg is legally theirs, for better or worse.

Banks vary in the specific rules governing these accounts, so it’s best to check with your banker to see if these make sense for you and your family.


There are many simple ways to ensure that your assets will be dispersed in accordance with your wishes. Using your local bank for some of these is a quick and simple way to be confident that your beneficiaries get what they need, immediately.

But it’s important to keep your bank records updated. Many people put their entire confidence in a will, most likely made at a later stage in life, thinking that it will supersede any insurance or banking designations they might have made in the preceding years or decades. In reality though, whomever you have listed to inherit from you on your bank or insurance accounts will probably get that money irrespective of what the will says.

Thus, it’s important to stay on top of all of your records and make sure your wishes are reflected in all of your documents.

Give us a call if you are confused about beneficiary designations on your bank and investment accounts or email

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