What is the meaning of account designation in regards to a bank account?
Account designation is a term used when talking about a beneficiary of a bank account. When an individual with a bank account dies, the account designation is the form that states to whom the account is given.
Most bank accounts require customers to fill out an Account Designation form, according to HSA Bank. In the event of death, this form states to whom ownership should be transferred.
Most issuers of stocks and mutual funds also require investors to fill out an Account Designation form to determine who would get ownership rights in the event of death, HSA Bank says.
Many 401(k) plans, along with other retirement programs, require account designations, according to HSA Bank. As with other types of accounts, this form specifies who gets rights to the account in the event of death.
Power of Attorney
Individuals with power of attorney over someone may also have to fill out an Account Designation form, according to M&T Bank, N.A. In this case, the form grants another individual the right to control power of attorney benefits over someone.
Changing Account Designation
An Account Designation form must be filled out every time the beneficiary changes.