When you open an account and set up a goal with Embark you have the option of adding beneficiaries to each of your accounts. This should be a priority, adding beneficiaies is an important step to ensuring a smooth transition of assets in the event of your death.
If you have proper beneficiary designations, your assets can transfer to loved ones quickly and easily upon your death, normally avoiding probate and perhaps even reducing estate taxes. Most people still need a will, but proper beneficiary designations can, in some situations, reduce the need for a comprehensive estate plan or trust. For people with more complex financial circumstances, you should consider additional estate and trust planning. Speak with your attorney regarding what would be best for you, given your personal situation.
To add a beneficiary first go to www.Embark-Invest.com and click Sign In in the upper right of the screen. After logging into your account, navigate to the settings page which is located on the bottom left part of your screen. On the Settings page, select Accounts from the sub-header menu located in the grey bar. On the Accounts Page, all of your accounts will be listed with their associated beneficiaries. Click on the blue primary and contingent beneficiary links to view current beneficiaries and edit, delete or add primary or contingent beneficiary information for each account.
A primary beneficiary receives your assets after your death. Your primary beneficiary must survive you (or be a charity or an existing trust). A secondary or contingent beneficiary will inherit your assets only if you have no surviving primary beneficiaries.
You should review your beneficiary information whenever you have changes in your life (marriage, divorce, birth of a child, etc.) or on a consistent basis- perhaps annually. Designating beneficiaries incorrectly, or failing to update them when circumstances change can have serious unintended consequences. For example, failing to update the beneficiaries on the retirement account you started 40 years ago may result in the account going to your parents instead of your spouse or the children you designated as heirs in your will and estate plan.
A beneficiary does not have access, control, or ownership over your account. Upon your death (or both account holders if the beneficiary is designated for a joint account), the assets are transferred to the beneficiary.
The beneficiary designations that you make on a retirement account like an IRA generally supersede any other instructions you leave, including your will. Thus, if your will states that your spouse is your IRA beneficiary, but the IRA itself designates your children as your beneficiaries, your children will inherit your IRA.
If you don’t designate beneficiaries for your IRA, your assets will pass to your spouse (if you’re married at the time of your death) or your estate (if you’re not married at the time of your death).
Adding beneficiaries to a nonretirement account registers the account as a Transfer on Death (TOD) account and any beneficiaries designated will receive account assets on your death. These designations will supersede any conflicting provisions of any will, trust, or agreement (except) for joint accounts. Thus, the decision whether to name beneficiaries on nonretirement accounts should be made within the context of your estate plan. Consult an estate attorney to determine what is best for you.
In a joint account, each customer has access, control, or ownership of the assets in the account. Each can transfer money, create goals, change allocations, etc. Upon death of one of the joint holders, the assets are transferred to the surviving account holder.
Yes, but we do not recommend you do so. Betterment only supports accounts for individuals the ages of 18 or older. If a minor should be appointed as a beneficiary of an account, Betterment may require court-appointed custodial documentation or an official guardian for the minor beneficiary prior to any funds being transferred. Setting a minor as a beneficiary may cause unforeseen delays. Note that Betterment can support trust accounts where a minor has been designated as the beneficiary. However, the trustee of the trust must be at least 18 years of age.
When setting up your accounts, be sure they are appropriately titled. If you have an estate plan, be sure that your beneficiary designations align with your wishes. If you are not sure, you should discuss this with the estate planning attorney that set up your plan.
If you have any questions about holdings in your account or one of our models, or perhaps have another question about our services, you can contact us directly at 920.785.6012 or email us at [email protected]. Betterment maintains a support line you can also call for help with navigation, linking your accounts or other site functionality. You can call the Betterment for Advisers support line at 800.400.1571.
Last updated January 9, 2023
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