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• Beneficiaries may be assigned to any traditional bank accounts.
• You may designate a beneficiary at any time, but you'll need certain documentation.
• Consider adding a beneficiary if you want someone to have easy access to your account after you die.

Preparing for unexpected circumstances includes having a plan for disruptions that can impact your family's financial stability. If you want to ensure someone can easily claim your bank account after you die, you may want to assign a beneficiary to your bank account. 

What is a bank account beneficiary?

A bank account beneficiary is an individual who may take over your bank account after you die. 

Most financial institutions allow you to designate a bank account beneficiary to traditional bank accounts, like savings accounts, checking accounts, CDs, and IRA accounts. 

Should you add a bank account beneficiary?  

Sophia Bera, CFP® professional and founder of Gen Y Planning, says adding a bank account beneficiary may be ideal if you're single or unmarried. It also might be worth considering if you want someone to have easy access to your bank account.

If you've died before you've taken care of your estate planning and will, your bank accounts will go through probate. As a result, it may take months before your assets are settled.

Adding a beneficiary may be helpful if your family needs to pay for funeral expenses, says Bera.

"If you don't have something like that setup, your account could go to probate, and your family members may have to wait months to access that money. If they're trying to wrap up your affairs that can be really costly," she adds.

If your family members are trying to figure out your affairs after your death, they'll also need to know where you can keep your money and how to access it. 

"I think it brings a really important conversation of knowing where you even have those bank accounts," says Bera.  "They can just be like, 'Here's where she keeps her bank accounts. Here's where she keeps her checking and savings. She has a 401(k) through work.' They'll know where everything is."

How bank account beneficiaries work 

While bank owners are alive, the beneficiary won't be able to view, deposit, or withdraw from the accounts. Bank account beneficiaries will not have access to the bank accounts until all bank account owners have died. 

Bera notes if you pass away, your beneficiary will need to present a death certificate to your financial institution to access your bank account. 

If you have a negative account balance when you die, the bank account beneficiary isn't required to pay the amount you owe. The person simply won't receive any money.

How to add a bank account beneficiary

If you'd like to add one or more beneficiaries to your account, you'll likely need the same documentation you would need to open a bank account. The following information may be required:

• Person's full name, address, and birthdate
• Social Security number or tax identification number
• Country of citizenship

Most financial will require you to contact your local branch or call customer service to add a beneficiary. However, some may also let you make changes to your account through online banking. 

Bank account beneficiaries may be added at any time. You don't need to assign a bank account beneficiary when you open a new bank account. You may also choose to remove a beneficiary from your account at any point if you need to.