VCU RamStrong Well-being blog

Giving VCU employees the wellness resources they need to be healthy both on and off campus

Some easy to follow, common sense tips for anyone enrolling in or updating their plans.

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No one wants to think about what will happen after they die. And yet, thinking about it—and planning now with that in mind—will ensure that your wishes are met, and your loved ones are protected at the end of your life. Who doesn’t want that?Assigning beneficiaries is a key step in protecting your assets. Setting up these designations—which say who will inherit your different accounts—allows your loved ones and/or charities to which you’ll give money to obtain your accounts after you have passed away without having to go through the time, expense confusion, and added pain of legal procedures. A beneficiary designation overrides a will, so it’s important to make sure your beneficiaries are clearly and definitively identified.  Here are some terms to know as you think about determining your beneficiaries:

  • POD, or “payable on death”: This agreement between you and your financial institution means your bank assets will be immediately handed over to your beneficiary upon your death.
  • TOD, or “transfer on death”: With TOD, beneficiaries receive stocks, bonds, mutual funds and other assets (for example, more than half of states allow TOD or beneficiary deeds for homes and automobiles) upon your death, without having to go through a legal procedure called probate.
  • Probate: This court-supervised legal procedure serves to prove that a will is indeed a last and final will and that there are no challenges to it or claims against the estate. Probate takes time and money, something you likely won’t want your loved ones to go through when you die.​

You will want to designate a primary and secondary beneficiary for all of your accounts. Your primary beneficiary is the person or entity that first receives the proceeds of your account upon your death. The contingent (secondary) beneficiary is your second choice to receive the benefit, only if the primary beneficiary dies before you.Choosing a beneficiary or beneficiaries may be straightforward—for example, if a person has a spouse they want as primary beneficiary and an adult child they want as secondary beneficiary. It can get more complicated or confusing if beneficiary determinations aren’t as obvious. Start by thinking about who is financially dependent on you—this person or people might be who you want to choose. A financial consultant can guide you through other questions you should ask and points you might want to consider.Contact your bank and investment company to set up POD or TOD on all your taxable accounts.  Plan to review your beneficiary designations periodically—at least annually, or when major life changes occur (death, divorce, new marriage or partnership, etc.).  

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