Last Will and Testament
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From: Napa
I had a client pass away several years ago, after a short illness. He had gone through a messy divorce a few years before, and was pretty pissed off at his ex-wife. After death, his ex got $150,000 from an insurance policy where he had forgotten to change the beneficiary. I swear I heard him cussing from his grave. Be sure to think about these legal issues in a divorce, as well as planning for your demise. If your will or trust says your IRA or your insurance goes to your new spouse, but the policy says it goes to the ex-spouse, guess who will get it every time?
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Joined: Aug 2002
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From: Randolph, NJ
I had a client pass away several years ago, after a short illness. He had gone through a messy divorce a few years before, and was pretty pissed off at his ex-wife. After death, his ex got $150,000 from an insurance policy where he had forgotten to change the beneficiary. I swear I heard him cussing from his grave. Be sure to think about these legal issues in a divorce, as well as planning for your demise. If your will or trust says your IRA or your insurance goes to your new spouse, but the policy says it goes to the ex-spouse, guess who will get it every time?
It is also very important to name a contingent beneficiary (or beneficiaries). In case something happens to the beneficiary or if for tax purposes the beneficiary chooses to disclaim, the contingent beneficiaries will get the benefit. Typically, a spouse who is the beneficiary wants to limit the amount in his/her estate and will disclaim so that the proceeds will pass to the contingent beneficiaries (typically the kids).
Now that the federal exemption is at $5.2 million it is less of an issue, but, it still may be of value as many have more than that in their estate. Also, some states have decoupled from the federal government and still have a smaller exemption. For example, New Jersey's exemption is only $675,000.
Either way, having up to date beneficiaries and contingent beneficiaries gives your heirs some flexibility, and will help to see that your wealth is distributed as you'd want it to be.
Thread Starter
Joined: Aug 2002
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From: Randolph, NJ
I wish everybody was on top of this as you are. You'd be amazed to know how few people are up to date with these things. You'd also be amazed to know how many people don't even have wills.
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From: Randolph, NJ
By the way, when I mention that your kin should know the contents of your wills, I don't mean that they need to know how much wealth is in your estate or how much money you have in the bank. I mean that they need to know who are going to be the executors, trustees and guardians. They need to know the location of your documents, where your accounts are and where all of your belongings are. For the most part, you can leave a document detailing most of this, but they need to know where that is. I have found that most people aren't very good at this.
Also they need to know the name a phone number of your attorney and accountant. Especially your accountant. Most accountants maintain records and can be very helpful in locating assets.
I recently had a client whose mother passed away. The mother had been a client for a very long time. I knew of things that the daughter didn't, and I was able to help the daughter locate certain assets and documents.
Also they need to know the name a phone number of your attorney and accountant. Especially your accountant. Most accountants maintain records and can be very helpful in locating assets.
I recently had a client whose mother passed away. The mother had been a client for a very long time. I knew of things that the daughter didn't, and I was able to help the daughter locate certain assets and documents.
Former Moderator
Joined: Oct 2003
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From: Houston/Durango
+ 1 Chris has similar problems almost every year with clients who don't keep their wills up to date.
For years we have had a good legal firm that makes sure we are current every year. Even so it is not uncomplicated.
For years we have had a good legal firm that makes sure we are current every year. Even so it is not uncomplicated.
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From: Napa
One more piece of advice. I have seen family fights you wouldn't believe, over estates. And I'm not talking about fighting over money, I mean who gets Grandma's china set ($100 value) who gets Aunt Betty's necklace ($75 value) or Uncle Charlie's favorite chair. (cost $ to cart away) I suggest that my clients put tags on the back of personal items who they want them to go to. Or list them in their wills or trusts. Or give them away while they are alive. If you are executor or trustee, get all the heirs in a room, each take a turn picking what they want, and don't let anybody leave not speaking to another. (I know, easier said than done).
Joined: Nov 2000
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From: Lewes, DE
Funny that you should mention this, Rob. Bea and I just updated our wills last week, and although there were only some minor changes, it is satisfying to know that our heirs will be well taken care of. The only glitch is regarding the 50 or so acres of farmland that I inherited from my mother in North Carolina. The attorney recommended that we prepare a revocable trust for the property so that my kids could immediately assume ownership upon my demise, thereby avoiding probate. Well, as it turns out, we have been unable to find a deed, since all that is left is remnant property from the original 125 acres that my dad once owned. (He sold off bits and pieces over the years, which left the remaining 50 acres.) Our attorney recommended that we contact a surveyor in North Carolina to survey the property and prepare a legal description so that there will be no problems with the trust. I just got off the phone with a surveyor who will do just that, so that everything will be legal and that there will be no issues regarding the property.
I agree with you, EVERYONE should have a will, regardless of age or how much you own or your net worth. Also, if you have any substantial property, a trust should also be prepared. In addition, you should have Powers of Attorney for you and your spouse, so that in case you are incapacitated, there is someone who can make decisions for you, and handle your finances. One more necessary document is a Living Will, which states who can make end-of-life decisions, should they become necessary.
Thanks for posting this, Rob!
(Maybe Legal Bill would like to add to this?)
I agree with you, EVERYONE should have a will, regardless of age or how much you own or your net worth. Also, if you have any substantial property, a trust should also be prepared. In addition, you should have Powers of Attorney for you and your spouse, so that in case you are incapacitated, there is someone who can make decisions for you, and handle your finances. One more necessary document is a Living Will, which states who can make end-of-life decisions, should they become necessary.
Thanks for posting this, Rob!
(Maybe Legal Bill would like to add to this?)
Joined: Oct 2000
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From: Philly (Narberth)
Something that I don't think anyone has mentioned yet:
Include a list of online accounts and PASSWORDS in a sealed envelope with your POA/HCPOA. If you are incapacitated, someone needs to know how to move around money between accounts, withdraw savings to pay bills, etc. After death, some of these passwords will also help to clear up online "business"....such as credit cards, social media accounts, s2ki membership
, etc.
We reviewed all of this stuff with our two adult children a year or two ago; one is general POA and the other is the HCPOA. We showed them where all files are kept and also shared with them our approximate net worth as shown in printout of online accounts. Our son's reaction was
Include a list of online accounts and PASSWORDS in a sealed envelope with your POA/HCPOA. If you are incapacitated, someone needs to know how to move around money between accounts, withdraw savings to pay bills, etc. After death, some of these passwords will also help to clear up online "business"....such as credit cards, social media accounts, s2ki membership
, etc.We reviewed all of this stuff with our two adult children a year or two ago; one is general POA and the other is the HCPOA. We showed them where all files are kept and also shared with them our approximate net worth as shown in printout of online accounts. Our son's reaction was
Joined: May 2002
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From: Somewhere in NJ
Jerry- You forgot to invite me over for that. I'm sure it was an oversight!
@Morris- My planner has suggested a 'Family Document' that goes through all the little things. I don't know if that's a real term or one they use. Apparently it should help with all the little things that change regularly and aren't typical Will type items.
@Morris- My planner has suggested a 'Family Document' that goes through all the little things. I don't know if that's a real term or one they use. Apparently it should help with all the little things that change regularly and aren't typical Will type items.
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From: Denton, Texas
Just one more thought. We have moved several times since we have created our wills / POA etc. You need to have it updated, or at least validated, for each state you live in. Law differs by state so you need to ensure your documents are valid in your current state of residence.