Having beneficiaries on your bank and investment accounts is an important and useful tool for managing your estate when you're gone. Most tax deferred accounts, such as 401(k)s and IRAs, require a beneficiary be listed on the account, but it is possible to name beneficiaries for almost any account you have.
There are two types of beneficiaries - primary and contingent. You can designate any share of the account to any number of people under either of these types. For example, you may want to put a spouse as sole primary beneficiary, so that if something should happen to you, they get the entire account, and put children as contingent beneficiaries, so that if something should happen to you and your spouse, your children split the account.
It is important to review and update your beneficiary information to make sure it is relevant. If you have recently gotten married, divorced or had children, you should check and see who you have named as beneficiaries. Often, a young person starting a job may put a parent or sibling as a beneficiary. If this is not changed, children or spouses could be left out accidentally.
One neat benefit of using named beneficiaries on an account is that it avoids probate. While probate in itself is does not have to be a big deal, it is a time consuming process that can be avoided with a little bit of work now. To inherit an account a beneficiary typically just has to produce proof of ID and a death certificate. Be sure that your named beneficiaries are still the ones you want to inherit your accounts, as this is a fairly final act.
Some states require that your spouse either be sole primary beneficiary or consent to being left off. Mississippi does not require this, but check with the custodian of your account to be sure.
Take a moment to think about your estate and what will happen when you are gone. Naming beneficiaries eases the transition process, but just make sure it is going where you want it. This is your last chance to have a say in it!