Tag Archives: beneficiary

Do you know where your parents’ important information is? 

do you know whereIt may seem morbid but have you asked them?  

This article from a New Zealand website is very applicable to us in the United States.  It’s a topic most of us don’t want to broach with our parents but it’s one that’s necessary to address.

Do you know how to get into your parents safe if necessary?

Knowing where their important documents and valuables are located in the event of an unexpected health crisis will give you, and them, peace of mind – especially if a parent is hospitalized and is unable to tell you where things are.

So before anything happens, it’s a good idea to talk to your ageing parents about what you may need to get one day; you may also want to consider letting your own children know where your key information is located as well.

You should ask your parents for the locations of the following items: 

1. Medical records 

If your parents find themselves in an emergency medical situation, doctors will want to know if they have any existing conditions, previous surgeries and any medications they’re currently on. If they have a spouse, that person probably knows the answers but it’s still a good idea for someone else (i.e., you or your siblings) to know just in case both of your parents are unwell or injured. 

2. Health insurance and life insurance information

It’s important to know where your parents keep their health and life insurance info, including any extras. You’ll also need to know where those cards are and you should ask to see their life insurance policies to double check their premiums are up-to-date.

3. Advance healthcare directive

This is a legal document that is also known as a living will and usually includes your parents wishes in the event of a major medical emergency. For example, they may have a Do Not Resuscitate (DNR) order or a health care power of attorney (POA) which differs from a general power of attorney. A POA allows a person to make decisions on behalf of another regarding his or her healthcare or medical treatment – this becomes active when a person is unable to make those decisions on their own or can’t communicate what they want. That’s why it’s important to talk to your parents about what they want to do if they find themselves in a situation where they’re no longer able to speak for themselves. 

4. Banking information 

This is a touchy subject but if a parent is suddenly out of commission, bills still have to be paid so find out where your parent’s bank is and get their account numbers, online access codes and PINs. It’s also important to learn how your parents pay their bills. Do they pay online, by check or direct debit? Ask them if they’ll add your name or one of your siblings to their bank accounts so someone else can access the account to make payments and manage it. 

5. Investment information 

This is information that cannot be ignored. Find out not only the location of your parents’ investments, but also the name and contact information of their advisor. You’ll also need to know what fees, required distributions and withdrawal penalties are. 

6. Deeds and titles 

Your dad may have kept the deeds and titles to your parents’ property in a box somewhere when you were a kid but do you know where those documents are now? Find out where the deeds to houses and land are as well as titles to their cars and/or recreational vehicles are. You may need them in order to liquidate their assets should a health crisis or sudden move to a care facility occurs.

7. Safe deposit box

Do you know if your parents have one? If yes, find out where they keep it and the keys and ask them what steps need to be taken to access the box. They may need to put your name on file so check with their bank. 

8. Hidden valuables

It’s been three years since my grandma died and my mum is still finding money and jewelry Grandma hid around her granny flat. Grandma lived through the Great Depression and had apparently stashed anything of value in the most curious places: money wrapped in plastic tucked inside the toilet cistern; jewelry hidden in the freezer, between her mattress, and even shoved deep inside the toes of some of her shoes – so it’s important to know if, and where your parents have hidden things. If they don’t want to tell you while they’re still alive, ask them to make a list and keep it with their wills. 

9. Wills, birth certificates, marriage licenses

Asking your living parent about their will may seem morbid and highly uncomfortable for everyone but dying without a will can be a costly affair and could start family infighting. It’s important to know if their wills are up-to-date. You’ll also need to know where their birth certificates and marriage license are located.

10. End-of-life decisions 

My father’s been telling me for years that if Mum dies, to put him in a boat and push him out to sea. While that seems rather melodramatic, it is important to know what your parents would like you to do after they die – do they want to be cremated? Buried at a cemetery? Have a huge party or somber church service? Find out what their end-of-life preferences are and let them know you intend to honor their wishes. 

For more information on this topic, check out our website, www.diesmart.com.


Have you made these 5 life insurance mistakes?

life insuranceWe came across an interesting article about life insurance on the Edward Jones web site.  It gives you some valuable information and some things to think about.  It’s reposted here in its entirety.

“If you already have life insurance, you’ve taken an important step to ensure your family is taken care of in case of an unexpected event. But just having it isn’t always enough. Do you have the right type or amount? Have you reviewed your policy lately?

These are the 5 most common life insurance mistakes people make.

1.  Having the wrong amount of coverage

Studies show that 1 in 4 people feel they need more life insurance protection.* So how do you decide how much is enough? Use our life insurance needs calculator, or “L-I-F-E,” to get a quick estimate. It will help you calculate your:

    • Liabilities (mortgage, car loans, student loans, other debt)
    • Income replacement – how much your family will need for ongoing living expenses and savings needs
    • Final expenses
    • Education expenses for your children or children

Once you have that number, compare it to your current policy amount and see how close you are.

2. Having the wrong type of policy (term vs. permanent)
Do you need insurance to cover you while you have a mortgage to pay or children at home? Or are you looking to build cash value in a policy that you can later pass on to your heirs? Each insurance type has its own advantages. Here are the basic differences:

Term insurance covers you for a specific time frame, typically less than 20 years. It’s the most basic, and affordable, type of insurance, which makes it a popular choice for young families who are balancing debt and saving for the future.

Permanent Insurance provides lifetime coverage and allows you to build cash value that you can later pass on to your beneficiaries. It’s more expensive than term insurance, but the premiums typically don’t increase with age.

Learn more about the differences between these two insurance types here.

3.  Relying solely on employer-provided insurance

Life insurance coverage provided by your employer might be okay if you’re single and without kids, but if you have dependents and large financial obligations, it may not be enough. Employer policies rarely cover more than 3 times an annual salary (the general recommendation is 10 times your annual salary) and sometimes only cover as little as 6 months’ salary. Plus, if you change jobs, you can’t take your policy with you.

4.  Neglecting to designate beneficiaries

Naming beneficiaries helps ensure that your insurance money goes directly to the people you intended, helping them avoid probate (the legal process of distributing your estate). This could save your family time and expense. If you have insurance from Edward Jones, your financial advisor can help you set up beneficiaries for your policy.

5.  Ignoring your policies

Life insurance is an important part of your overall financial plan and should be reviewed at the very least every 3-5 years. If you’ve recently gotten married, divorced or welcomed a new baby in the home, it’s time to review your policy to ensure your coverage amount and policy type still work for your situation.”

For information about financial and estate planning, check out our website www.diesmart.com.

Do I Really Need a Will?

last-willYes, you do.  A will is a legal document which ensures that your property is transferred according to your wishes after your death.

If you don’t have a will, here are five things that can happen.  We found this list at nerdwallet.com.

  • Spendthrift heirs – If you have heirs who aren’t equipped to handle a large sum of money, receiving it may cause damage.  Perhaps these heirs are bad at handling money or, maybe, they’re drug or alcohol addicts.
  • Unexpected or contested heirs –  There may be confusion about who the beneficiaries really are.  Sonny Bono, musician and politician, died without a will.  His ex-wife, Cher, and a man who said he was Bono’s son tried to claim part of his estate, which his wife, Mary, contested in court.  Prince’s estate is another classic example.  Many people came out of the woodwork claiming to be relatives, entitled to a piece of his assets.
  • Property (and probate) in multiple states – If you own property in more than one state, your estate will have to go thru the probate process more than one.  Probate is a costly and timely process, even if you just go through it once.  Image if you own property in four states and your heirs have to hire four attorneys and go through the whole process four times.
  • Fabricated wills – If you don’t have a real will in place, it’s possible for someone to create a fake one – especially if your estate is large.  A famous case involved the estate of tycoon Howard Hughes.  When he died, several supposed wills surfaced, and his estate spent millions of dollars defending against the false documents.
  • Beneficiaries don’t like the court appointed executor – If there’s no will, the probate court will appoint one.  It may likely be an experienced attorney but not necessarily one the family knows.  It may take a great deal of time for this person to take inventory, appraise assets and distribute the estate.  If you have a will and name a family member as executor, that person will usually do a much faster job, possibly because that person is also a beneficiary.

If you don’t have a will, you should prepare one now.  Otherwise, your assets may not be distributed the way you want them to and a lot of extra money will go to attorneys and the probate court and not to your heirs.

For more information about wills, trusts and other estate planning documents, go to www.diesmart.com.

Want to avoid probate?

estateplanningYou may think that if you have a will and in it you name the person who should inherit your home, that’s all you have to do.  Yes, it is if you’re willing to have the home go through a probate process.  That probate process will cost the beneficiary a lot of money as well as time and will be a public record.

However, there’s now a way that many can avoid the whole probate process and that’s thru the use of a transfer on death (beneficiary) deed.

There are several states that have a similar law and California just joined their ranks in January of this year.

If you live in one of these states, you now have the option to complete a Revocable Transfer On Death Beneficiary deed and name a beneficiary for your home.    After your death, the beneficiary can directly claim ownership rights to the property without involving the probate court and paying probate fees.

The deed can be completed and filed without hiring a lawyer or paying a third party to record the deed with the county recorder.

For some homeowners, a TOD Deed can be a cost effective way to avoid probate on the death of the last owner.   If you own a home and have it listed in your will, you might want to consider this new option.

For more information about probate and estate planning, go to www.diesmart.com.

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.