Portfolio Management February 16, 2017

    Why do you need to name a beneficiary on different accounts, like an IRA, 401(k), brokerage account or life insurance policy?

    No one likes to think about what would happen to their assets if they died unexpectedly, but it’s important to do so—and be sure to name the right beneficiaries for different accounts.

    This simple but important step helps protect your assets by ensuring they go to the person you intend. And it also helps your loved ones during what can be an emotionally and financially difficult time.

    Beneficiaries are unique to each account and do not carry over from old accounts.

    Schwab Intelligent Portfolios offers a range of account types. Clients can designate beneficiaries for both individual retirement accounts (IRAs) and brokerage accounts. However, the process for updating your beneficiaries differs between the two, so make sure you follow the correct steps for the type of account you have.

    Choosing a beneficiary for retirement accounts

    With retirement assets, a will is not the way to make your wishes known. Instead, you must designate at least one beneficiary—whether a family member, friend, trust or charity—for each account you own.

    This ensures that if the worst should happen to you, your retirement assets will go exactly where you specify. In fact, if you don't have a beneficiary designation on file with your financial institution, the courts could make that important decision for you.

    Depending where you live, your account could go into the potentially long (and expensive) legal process known as probate. That could cost your loved ones time as well as money, not to mention add to their stress at what may be the worst possible time.

    Designating beneficiaries for Schwab Intelligent Portfolios® retirement accounts

    To add or update your IRA beneficiaries online, log in at intelligent.schwab.com and select your IRA account:

    1. Click on the Profile tab.
    2. Click Update Beneficiaries.
    3. Click the Add or Modify button.

    Note: You will need the name and date of birth (if the beneficiary is a person) to add or modify your beneficiaries.

    Choosing a beneficiary for nonretirement accounts

    With a brokerage account, the type of ownership you choose could dictate where your assets go. For example, an individual account typically would go to your estate (and be distributed according to your will—after going through probate), while your interest in a Joint Tenant with Right of Survivorship account would go to the surviving owner(s).

    By contrast, a Schwab Designated Beneficiary Plan Agreement enables your brokerage account to avoid probate. That said, if you already have an estate plan or a trust in place or are considering one, consult with your advisor or attorney to avoid any conflicts between your estate plan and your account beneficiaries.

    Designating beneficiaries for Schwab Intelligent Portfolios nonretirement accounts

    Start by logging in at intelligent.schwab.com:

    1. Click on Legal & Account Forms from the menu.
    2. Scroll down to Account Servicing Forms and select Designated Beneficiary Plan Application.
    3. Complete, sign and return the Designated Beneficiary Plan Agreement.

    Know the right steps to take

    Naming beneficiaries typically only takes a few minutes, depending on the account and your financial institution. It helps to have the Social Security or tax ID number and address handy for anyone you plan to name.

    Review your beneficiaries periodically, especially if your financial situation changes due to marriage, children, divorce, employment status, etc.

    How Schwab Intelligent Portfolios Can Help

    You can have as many as 10 different types of Schwab Intelligent Portfolios accounts, each with a customized strategy for a specific goal. Be sure to set up a beneficiary for each account you open.

    (0217-UTAG)


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