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.
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.
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.
1) Michael Jackson died in 2009 at age 50. A will did finally surface naming his mother and children as his beneficiaries. However, his estate is still in the news. The IRS is claiming that posthumous projects initiated by the estate are worth more than $434 million and they want their share of the take.
2) Amy Winehouse died in 2011 at age 27. She was thought to have a will when she died, but it turned out she didn’t. Her estate ultimately went to her parents.
3) Bob Marley died of cancer in 1981 at age 36. It took more than 30 years before his estate was settled. Under Jamaican law his estate was to be divided equally between his wife and his 11 children. Court battles raged for many years to determine who was entitled to Marley’s name and likeness.
4) Jimi Hendrix died in 1970 at age 27 but the fight for his estate went on for more than 30 years. The estate went to his father and when he died, Hendrix’s sister was left in control of the musician’s $80 million estate. However, the court fight was about who had the right to use the singer’s image and it was finally settled shortly before a scheduled July 2015 jury trial.
5) Sonny Bono died in 1998 at age 62. His wife Mary Bono has to go through probate court to become the executor of the estate and it ultimately was divided between her and his two children.
6) Kurt Cobain died in 1994 at age 27. His wife Courtney Love was the primary beneficiary of the publishing rights to his estate. In 2010 the couple’s then 18-year-old daughter took control of her trust fund which was more than a third of the estate. That same year, Love gave up rights to Cobain’s name and likeness for a loan.
Just because these people were not prepared and did not leave wills, that’s no reason for you to follow suit. Don’t let the probate court decide who should inherit your estate. Write a will and tell your family and other loved ones what you want to have happen to all of your assets. You decided and make your wishes known.
Even though more than 50% of US citizens still don’t have a will, you’d think that the presidents of the United States, with all of their legal advisors and staff, would definitely have protected their property by preparing one.
Two presidents who did leave wills freed slaves in them. George Washington left his entire estate to his wife Martha. He requested that, upon her death, all of their 317 slaves should receive their freedom.
Thomas Jefferson actually freed some of his slaves in his will – 3 older men who worked for him for decades and two of Sally Heming’s four children.
Most other presidents left fairly standard wills, leaving their assets to family members, though a few left special bequests.
Richard Nixon bequeathed his personal diaries to the Richard Nixon Library and Thomas Jefferson gave his friend and former president James Madison his gold-mounted walking staff.
Regardless of what presidents have or have not done, you should definitely consider getting a will prepared today. Otherwise, the government will decide what happens to your assets, not you.
For more information about wills and other end-of-life planning, go the www.diesmart.com.
If you’re like most people, you have some kind of debt – a mortgage, a credit card bill, school or a car loan. What happens when you die? Do your heirs have to pay your bills for you? According to a recent U.S. News and World Report article, the general rule of thumb is that if there’s enough money in your estate, your bills will be paid out of the assets you’ve left. Those assets will be liquidated to generate the necessary funds.
If there’s not enough money in your estate, here’s what will probably happen. I say “probably” because there are no firm rules in this area and each case is different.
As long as you don’t have a co-signer on your credit card, the odds are that the debt will be discharged by the credit card company. If you have a co-signer, that person will be responsible and will have to pay whatever is owed.
If the house isn’t paid off, the bank may decide to foreclose…unless someone takes over the monthly payments.
If you are making car payments when you die, your vehicle can be repossessed by the bank. However, if one of your family members is willing to take over the loan, there should be no problem.
There are a few caveats that you should be aware of.
If you owe a lot of money and make deathbed gifts, your creditors may be able to convince the court to return those gifts to the estate so that their bills can be paid.
Your children or spouse should be careful about cosigning financial agreements for you. This personal financial guarantee may obligate them to repay any money owed through these agreements after you die.
If you don’t want your loved ones “haunted by debt collectors” after you’re gone, make sure they’re careful about what they sign.
For more information about how to manage your estate and what happens when you die, go to www.diesmart.com.