Tag Archives: beneficiary

Are your beneficiary designations up to date?

Do you have a bank account? What about a brokerage account or life insurance policy? Have you set up an annuity or a retirement plan?

You probably have a least one or two of these types of accounts. When you set them up, you were asked to name a beneficiary for each. At the time, the person you named was someone you wanted to receive these assets when you died. It might have been a spouse or significant other.

It’s been several years since you named that person. Have your circumstances changed? Are you now divorced or no longer involved with him or her? Have you remarried or had children you want to be sure are protected?

Most people name a beneficiary and then forget about it. They never go back and update the information provided so it reflects their current wishes. They figure it doesn’t matter because they have a current will that designates who should inherit what. However, it does matter. Whoever is named as a beneficiary receives that asset when you die, regardless of what it says in your will. So your ex-husband or former girlfriend may receive a large sum of money that you didn’t want them to have.

Don’t let this happen. Review your beneficiary designations whenever your circumstances change and be sure that your assets will go where you want them to when you die.

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

You need a will. Why shouldn’t you write your own?

Most blank will forms are based on the assumption that you are part of a traditional nuclear family with a husband, a wife and a common set of children. It will further assume that you wish to follow the traditional path of inheritance: The surviving spouse will inherit the deceased’s assets and they will they pass to the children upon the second spouse’s death.

Instead, as is very often the case today, you may be part of a blended family. If so, you should definitely see an attorney and prepare a will that will protect every member of that new family.

Let’s look at an example of what might happen if you don’t have a well written will.

John and Susan had both been married previously. John had two children from his first marriage and Susan had three. When they got married, all was well for several years. Then John died suddenly. Susan inherited all of John’s estate (which included assets he had brought into the marriage).

When Susan died, her three children inherited her assets; John’s children got nothing. Why, because they were not Susan’s legal children and neither John or Susan’s will legally protected them. A lengthy legal battle ensued with the biggest winner being the attorneys.

Although this blog is based on an article from the Sydney Morning Herald, it is critical for everyone in a blended family to take heed.

Make sure your legal paperwork protects your family and distributes your assets the way you want them allocated. Don’t take a shortcut now that may result in unnecessary pain and suffering at a later date.

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

No power in the house – a digital death problem!

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 & 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

As 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.