What’s the best way to manage beneficiaries for bonds?

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Q. I’m thinking about bonds and the best way to manage them. Do I put them in my name with my son as beneficiary if I die and then how do I name it for my granddaughter?
— Grandma

A. We’re glad you’re planning ahead.

Which bonds are best, and how you title the bonds will all depend on your financial goals and risk tolerance.

Treasury bonds are considered very safe, while corporate bonds offer higher yields with higher risk, said Ryan Zacharczyk, a certified financial planner and president of Zynergy Retirement Planning in Red Bank.

Then there are municipal bonds, which are tax-advantaged.

“To manage bonds, it’s a good idea to diversify your holdings, stagger maturity dates and consider bond funds for convenience, Zacharczyk said. “Regularly review your portfolio to ensure it aligns with your objectives. Consider consulting a financial advisor for personalized guidance.”

Zacharczyk said in New Jersey, designating beneficiaries for a bond typically involves completing a beneficiary designation form provided by the bond issuer or financial institution.

“You can specify one or more beneficiaries who will receive the bond’s proceeds upon your passing,” he said. “This designation helps bypass the probate process. Keep the beneficiary information up-to-date, as it takes precedence over will instructions.”

Consider consulting with a legal or financial professional for guidance specific to your situation.

In most cases, you can update or make changes to the beneficiary designation for a bond, such as for your granddaughter.

“Contact the bond issuer or the financial institution holding the bond to request and complete a new beneficiary designation form,”  he said. “It’s important to keep your beneficiary information current to ensure your assets go to the intended individuals or entities upon your passing.”

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This story was originally published on Nov. 21, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.