Tag Archives: beneficiary

No power in the house – a digital death problem!

51j2ST20YwL._SX384_BO1,204,203,200_A Sad but True Story from Access Denied illustrates a major problem that many survivors face when trying to deal with their loved one’s death.

“Marsha’s husband, Greg, went bike riding with some friends, something he did most Sunday mornings. A car careened down the street and hit him; he was killed instantly.

“Greg was the main breadwinner and his income paid for their living expenses. His salary checks were automatically deposited into his bank account. Their bills, including mortgage, utility bills and insurance premiums, were automatically paid from this account.

“When he was killed, Marsha was distraught. The death was totally unexpected. Greg was 46 and in great health. She spent the first few months after his death just grieving and wringing her hands. She could cope with very little and wasn’t thinking clearly. She never thought about the practicalities of how digital death were affecting her life.

“Because Greg was gone, paychecks were no longer being deposited into his bank account, so money to pay the bills quickly ran out. The checking account and the online utility accounts were set up with Greg’s name and email address. Past due notices and notices of returned checks were being sent to Greg’s email account, and Marsha knew nothing about them.

“Then, one day she came home to find she had no power. When she called the power company to find out what was wrong, they informed her that the bill for her address had not been paid. They had cut off the power and Marsha was in the dark with no heat and no electricity.

“Here’s how the call went:

PG&E answering machine: Hello, how can I help you? Press 3 if you are calling for help with billing.
Marsha: Pressed 3
PG&E answering machine: Please enter your account number so we can help you.
Marsha: Thinking to herself: I have no idea what the account number is. We haven’t received a paper bill in ages. Why don’t they ask me for Greg’s email? I know that.
PG&E answering machine: I’m sorry. Let’s try again. Please enter the account number. We’ll need that before we can help you.
Marsha: Clicking 0, 0, and 0 looking for a way to get connected to a real person.
PG&E (a real person): Hello, this is PG&E. How may we help you?
Marsha: The electricity at our house has been disconnected. I need to make a payment.
PG&E (a real person): Do you know the account number?
Marsha: No. My husband paid all of our bills.
PG&E (a real person): What is your husband’s name?
Marsha: Greg Thomas.
PG&E: What is your relationship with Greg?
Marsha: I’m his wife.
PG&E: Is Greg there? We can’t take a payment from anyone but Greg.
Marsha: No. Greg died several months ago.
PG&E: We are very sorry to hear that. Unfortunately, we can’t take a payment or transfer service to your name without you being here in person and providing proof of your relationship to Greg.
Marsha: You’re kidding right! It’s 20 degrees outside, and I don’t have any heat.
PG&E: I’m sorry. There is nothing we can do at this time. Please visit your PG&E office Monday morning with the right documentation, and they will be able to help you.
Marsha: (In one last effort for help) Can’t you just give me Greg’s password? I could log in and pay the bill electronically.
PG&E: Do you have documentation from Greg authorizing access to his account?
Marsha: No (thinking to herself: I have no idea what she is talking about).
PG&E: Sorry, there’s nothing else we can do.”

Don’t let this happen to you.  Makes plans for what will happen to your digital estate when you die and protect your family.  For more information and help on this critical topic, get a copy of Access Denied today.

Don’t let your ex-spouse get your life insurance proceeds

Jackie and Warren Hillman

Jackie & Warren Hillman

When you buy a life insurance policy, you name a beneficiary who will inherit the proceeds when you die.  It’s important to keep that beneficiary designation up to date or the wrong person may benefit.

One such case that went all the way to the Supreme Court was that of Warren Hillman. Hillman died in 2008 shortly after he was diagnosed with leukemia. He was 66. He had been married three times. When he died, his assets included a life insurance policy worth $124,558.03.

But Hillman made an all too common estate planning error. In 1996, while he was working for the federal government, he took out a life insurance policy and named his second wife, Judy Maretta, as his beneficiary. When he and Maretta divorced in 1998, he didn’t change the beneficiary designation on his policy. It was a policy that was part of a life insurance program for all federal employees and the law for that program says that the proceeds on death are paid according to the beneficiary designation.

He married Jacqueline Hillman in 2002 and was with her until he died.

Since his death, his second ex-wife, Judy Maretta, and his widow had been fighting over that money. In June, 2013, the U.S. Supreme Court found that Maretta was entitled to all of it because she was still listed as the beneficiary.

If your life circumstances change, be sure to update the beneficiary forms for any policies that you have. Otherwise, your ex-spouse may get your life insurance proceeds.

For further information about beneficiaries, go to www.diesmart.com.

 

 

 

An important holiday gift

present-clipart-Present-Clip-Art-932As we approach the end of another year, it’s a good time to have an important discussion with your family and other loved ones about what will happen when you die. It may be uncomfortable but it’s a gift you should give them before any more time passes.

You should tell them about your estate plan – not necessarily all of the details but where it can be found, that it is up to date and who you have named as your executor. The estate plan should, at a minimum, include your will and your advanced directive; it might also include a trust, a healthcare proxy and a durable power of attorney. You should reassure them that the plan is current and reflects your wishes at the present time. (If it doesn’t, you should get it updated immediately.)

Another critical thing you should discuss is your digital assets. If you pay your bills and conduct other financial transactions online, your executor should be able to access your accounts. The only way to ensure that this is possible is if you leave a list of your passwords for all of them.

You should make sure they know about any accounts that have beneficiary designations and that those designations are up to date. Otherwise, someone who is no longer in your life may inherit from those accounts rather than the person you really want the funds to go to.

Finally, you should discuss with your family and other loved ones your end of life care wishes. It’s not a pleasant topic but you should not burden them with having to make decisions which may not agree with what you would have wanted.

This is an important holiday gift that you should give to your loved ones this year.

For more information about making a digital asset inventory and other end of life decisions, go to www.diesmart.com.

 

5 ideas to consider when doing estate planning

k8758525

If you have a spouse and family, you’ll probably leave everything to them.  However, if you don’t have a spouse or kids and you’ve been procrastinating doing your estate planning because you’re not sure what to do about all of your stuff, here are 5 ideas you should think about consider.  We found them in the Rapid City Journal.

  1. Consider leaving something to close friends, caregivers or anyone else who you are close to.
  2. Think about charities that are meaningful to you.  What organizations have goals that match your own?
  3. Think about where a donation could benefit your community.  There are places like libraries, volunteer fire departments, arts organizations that would welcome some extra funds.  What about giving a piece of art to a hospital or buying a park bench?
  4. Build relationships with people who share your interest in collections of antique, tools or other items.  Then you can pass along your collections to people who will appreciate them and remember you.
  5. Don’t wait until you’re gone.  Consider donating collections to museums or giving personal possessions that you value but don’t necessarily use to someone who would appreciate them.

For more information about 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.