Can an Estate Be a Named Beneficiary?

By Larissa Bodniowycz, J.D.

Can an Estate Be a Named Beneficiary?

By Larissa Bodniowycz, J.D.

Many assets allow you to name one or more beneficiaries to receive the asset after your death. You can list your estate as a beneficiary, or assignee, but doing so makes the asset subject to the probate process before distribution.

Document labeled last will and testament

Beneficiary Designation

Many types of assets allow their owner to name one or more beneficiaries to receive the asset without having to go through probate when the owner dies. Common examples of assets that allow nonprobate beneficiary designation are bank accounts, insurance policies, certificates of deposit, and bonds. Financial accounts that allow this are referred to as "payable-on-death" or "transfer-on-death" accounts. These accounts do not go through probate if you name one or more specific people as beneficiaries. A court must prove a will as valid and legal, but these accounts literally transfer on death.

The beneficiary designation controls what happens to the asset when the owner dies, even if the will seems to contradict the designation. For example, if Mark Doe names Jane Doe as the assignee on a bank account but in his will names John Doe as the heir of all of his assets, Jane is the one entitled to the funds in that bank account.

Estate as Beneficiary and the Probate Process

Generally, you can name your estate as the assignee of any assets that allow a death beneficiary. An estate includes all of a person's assets at their death. Collectively, the assets that must go through the probate process are the "probate estate."

When you name an estate as beneficiary, the asset becomes part of your probate estate and your will controls who receives the asset. To do this, you must list "the estate of" followed by your full legal name in the beneficiary designation for the asset.

The probate process is a formal court process that distributes a deceased person's probate assets and pays off their debts. In many cases, probate takes more than a year, and the fees and taxes involved in probate come from the deceased person's assets. In short, naming your estate as beneficiary and consequently directing an asset such as a bank account to the probate process results in your beneficiaries waiting longer and receiving less than they would if the account was a non-probate asset.

Other Beneficiary Options

Instead of naming your estate as beneficiary of your assets, you can directly name one or more people as the beneficiaries or you can name your trust as the beneficiary. Both of these options avoid probate of the asset and can usually meet the same goal.

There is still administration involved in disbursing trust assets, but it is typically much quicker than the probate process. Trusts can also help avoid or minimize certain taxes.

Naming beneficiaries on accounts is just one part of this type of plan. Documents such as wills, living trusts, living wills, and powers of attorney are other common components of an estate plan. Everyone's estate plan is different, and you must always consider the impact each document has on the others. Many people turn to an experienced attorney to help them create a comprehensive plan.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.