What is one of the primary benefits of having a beneficiary on a segregated fund?

Having a beneficiary designated on a segregated fund plays a crucial role in estate planning, and one of its primary benefits is that it helps avoid the probate process. When a beneficiary is named, the assets within the segregated fund are directly transferred to the beneficiary upon the account holder's death. This bypasses the often lengthy and complex probate process, which can be both time-consuming and costly for heirs.

By avoiding probate, beneficiaries can receive their inheritance more quickly and without the associated legal fees and delays that typically come with the probate court system. This direct transfer also offers added privacy, as probate proceedings are public records, while a segregated fund with a designated beneficiary can remain confidential.

The reasons related to other choices—like simplifying the tax filing process, ensuring growth, or increasing fund performance—are secondary considerations that do not directly relate to the primary nature of the beneficiary designation in the context of segregated funds.