Tag Archives: beneficiary law

Did he really just get the lorry?

junkyardAlthough this actually happened in the UK, it could just as easily have happened here.

Fred McGuinness owned a scrap yard.  When he died at age 64 in 1987, he left everything to his wife Edith.

He had four children: David, Freddie, Kevin and Denise.  David claimed that he and his brothers had been promised shares of the business to pay them back for all the years they spent working in the family business.

When Edith died at age 87 in 2013, David fully expected that their time had come to get their reward.  However, Edith left everything she had, including the yard, to Denise.  The only other bequest was a small one to charity.  In a letter Edith wrote to accompany her will, she said that she and Denise had been excluded from the business and “mistreated”.

Although Denise owned a quarter of the business, her bookkeeping role had been eliminated, she never got a bonus and her pension was a “pittance”.

Edith also wrote that “since Mr. McGuinness passed away, she had watched his once-thriving business ‘go to nothing from greed’.”

Edith’s estate was valued for probate at more than £3million after tax and the court heard that a £12million offer had been received for the yard.

Although David had “taken it for granted” that he would inherit part of the yard, the probate judge disagreed.  He said there was never “a cast iron promise” that the yard would be divided among all of the children.

The judge further ruled that the only thing David would inherit was a classic Morris lorry, valued at about £10,000.

You can’t assume that what’s been casually mentioned as what you’ll inherit will stand up in court.  If you feel that something should rightly be yours, be sure to discuss it with your parents while they are still alive and get their commitment put into a legal document.  Otherwise, you may find yourself – like David – without the inheritance you had been expecting…and experiencing friction with any other heirs.

Everyone should have a will that outlines what they wish to happen to their assets when they die and clearly spells out the terms.  If you have assets, don’t delay.  Get a will written today.  You can either find a “do it yourself” version on the web or, if your estate is larger or more complicated, find an estate attorney who will prepare one for you.

For more information about estate planning and will writing, go to our website, www.diesmart.com.

What’s UFADAA and why should you care?




We’ve talked several times about the importance of managing your digital assets and making sure your loved ones will be able to access them when you’re gone.

UFADAA stands for Uniform Fiduciary Access to Digital Assets Act.  It was developed by the National Conference of Commissioners on Uniform State Laws and is a recommended act that all states are encouraged to enact.  The first approved version of the act did not meet the needs of the states and very few of them approved it.  However, in late 2015, a revised act was passed.  It has several important points:

  • It gives internet users control.  It allows users to specify whether their digital assets should be preserved, distributed to heirs or destroyed.
  • It provides efficient uniformity for all concerned.  Digital assets cross state lines.  A uniform law ensures that fiduciaries (the people who are appointed to manage our property when we die or are unable to manage it ourselves) in every state will have equal access to digital assets and custodians will have a single legal standard with which to comply.
  • It respects privacy interests.  It prevents the companies that store our communications from releasing them to fiduciaries unless the user consented to disclosure.
  • It works hand-in-hand with federal and state law.  Fiduciaries must provide proof of their authority in the form of a certified document.  Custodians of digital assets that comply with a fiduciary’s apparently authorized request for access are immune from any liability under statutes that prohibit unauthorized access.  A fiduciary’s authority over digital assets is limited by federal law, including the Copyright Act and the Electronic Communications Privacy Act.

19 states are considering passing a law that encompasses at least some of what was recommended in the revised UFADAA.  You should contact your representatives and urge them to enact this legislation.  It will make it much easier for you to manage the digital estate of a loved one after he or she has died.

For more information about UFADAA and other issues related to your digital estate, check out our book ACCESS DENIED: WHY YOUR PASSWORDS ARE AS IMPORTANT AS YOUR WILL.


Are your loved ones protected when you die?

last-will  Larry and Susan had been living together for more than 20 years.  They never legally married; they said once had been enough.  A piece of paper wouldn’t change how they felt about each other.  Larry had been married before and had two sons.  Susan had also been married previously and she had a daughter.

When Larry’s father became incapacitated, they moved into his house to take care of him.  His father, to thank them for all they’d done, left the house to Larry in his will and named Larry beneficiary of his life insurance policy.  When his father died, Larry inherited the house and Susan and Larry continued to live in the house.  Larry promised to deposit the check from the insurance company into their joint bank account as soon as it arrived.

As Larry was crossing the street on his way home from work one day, he was struck by a car driven by a drunk driver and he died almost instantly.

Larry didn’t have a will and had not left any legal document naming Susan as his heir.  They lived in a state that did not recognize common law marriage so, when he died, his sons inherited everything.  They forced Susan to move out of the house and refused to give her any of the proceeds from the life insurance policy.  In essence, Susan was left with almost nothing!

Families today are very complex.  Some are the traditional married mother and father in their first marriage.  Many more are couples who were previously married to other spouses or who are legally married gay couples.  However, many people live together without benefit of a legal ceremony. This mixture of circumstances makes inheritance much more difficult and complex.

The only way to be sure your loved ones are protected is to prepare a will or a trust naming the person(s) you want to inherit your assets when you die.  Otherwise, state law will dictate who receives what.  Not you. It’s frightening that more than half of the people living in the United States today do not have a will and have not protected their loved ones. You can find a simple will form on the internet or can meet with an estate planning attorney to discuss the options that are best for you.

Don’t be like Larry.  Act now so those you love will be protected when you’re gone. For more information about wills and estate planning, go to www.diesmart.com.

Unclaimed property – Are you a beneficiary but you don’t know it?

Over the last five years or so, a study has been conducted to determine how insurance companies ensured that beneficiaries of life insurance policies were notified that a relative with a life insurance policy had died.

The study was initiated by California Comptroller John Chiang, who used a Connecticut auditing firm to examine the payment practices of 21 life insurance companies nationwide.  The Controller’s investigation “has revealed an industry-wide practice of companies both failing to pay death benefits to the beneficiaries of life insurance policies and ignoring their legal duty to turn the money over to the State for safe keeping.  Instead, companies would draw-down the policies’ cash reserves in order to continue collecting premium payments from the deceased.  Once the cash reserves were depleted, the company would cancel the policy.  Past audits also found that insurers did not routinely cross-check the owners of dormant accounts with government databases listing the deceased.  In other cases, companies had direct knowledge of the policy owner’s death, but still did not notify the beneficiaries.”

When questionable practices were uncovered, lawsuits ensued.  The premise of one of the latest was that insurers used the Social Security Death Master File to determine whether  those insured who had living benefit riders to annuities had died and, if so, they acted promptly to stop payments.  However, the Death Master File and other means weren’t used as often to ensure that beneficiaries of life insurance policies were promptly notified that a relative with a life insurance policy had died, and the funds from that policy paid out.

In the case of one recent lawsuit, the lead plaintiff claimed that he was notified only in 2010, four years after the death of the insured, and then only by the state of Illinois Treasurer’s Office…not by the insurance company.  He received only a small sum, and it wasn’t until June 2012 that a larger sum was paid, without a good explanation.

Earlier this month (June 2013), Mr. Chiang reached a settlement on behalf of the state of California and its residents with 11 insurance companies who had been found to have underpaid life insurance benefits.  The agreements he reached required the 11 companies to do the following:

  • Restore the full value of all impacted accounts dating back to 1995;
  • Fully comply with California’s unclaimed property laws and cooperate with the Controller’s efforts to reunite these death benefits, annuity contracts and retained asset accounts with their owners or, in many cases, the owners’ heirs;
  • Pay the policy beneficiaries 3% compounded interest on the value of the held amounts from 1995, or from the date of the owner’s death, whichever is later.

If the benefits are not paid to the heirs within a specified period of time, the law requires businesses to send the list of abandoned property to the state.  In California, the period of time is three years; it varies by state.  In many states, this has become a large source of revenue.  However, the states’ first goal is to return the money to its rightful owners.

Many other states have followed California’s lead, filed suits against the major insurance companies, and will also benefit from California’s settlement with those 11 companies.

To learn more about beneficiaries and estate related topics, go to www.diesmart.com.



Opt out – It’s one more way to prevent identity theft

You probably know that identity theft is a huge problem in the United States.  It occurs when someone uses your name or Social Security number to obtain identity documents and then uses them for financial gain.  But you may be surprised to learn that 25% of all identity thefts are of people who are deceased.

There are several ways to prevent identity theft and these are discussed in our book “Grave Robbers…How to Prevent Identity Theft of the Deceased.”  The second edition of this book will be out shortly.

One way you can deter thieves is by not getting unsolicited applications for credit cards or insurance.  If you’re like me, you get at least a few of these mailings every week.  And what happens to these applications?  If they come to your home,  you quickly retrieve them from your mailbox and then shred them, probably nothing.  But if they come to the home of someone who is deceased, they may sit in the mailbox for awhile, easy prey for an identity theft.

There’s one simple thing you can do.  Go to OptOutPrescreen.com and opt out.

What does this mean?  The consumer crediting reporting companies usually include your name on lists used by creditors or insurers to make offers.  When you opt out, your name can longer be included which frees you from unsolicited mail and protects your identity.  When you opt out on behalf of someone who is deceased, you are making it more difficult for an identity thief to steal their identity by applying for credit cards or insurance in their name.

It only takes a few seconds to do, costs nothing and will not only eliminate some of the unwanted mail you probably receive every day but will protect your identity as well.

For more information about identity theft as well as other end of life and after death issues, check out our website: diesmart.com.