Tag Archives: inheritance

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Avoid the Inheritance Nightmare

This is ‘A lesson in what not to do’ my client said to me.  He asked me to share it with others to hopefully prevent anyone else dealing with the mess that you are about to read.

In May 2009, his father-in-law passed away at the age of 91.  He was a widower, in good health, and still drove at 91.  He lived a simple life, as most depression era children do.  Most of his expenses were on food.  His needs were little and his assets far exceeded anything he would be able to spend.  Sadly, he was involved in a car accident that lead to his hospitalization, and a subsequently a quick deterioration in his health.  He died in a matter of days.treasure map

For the past 3 weeks, my client and his wife have been on a scavenger hunt tracking down each of his $100,000 CD’s at various banks to maintain FDIC protection.  With each of 4 IRA’s they have located to date, they discovered that his wife, who died long ago, was named beneficiary.  He assumed that his will and his trust would flow the money as he desired to his 2 daughters.    So far they located total assets of approximately $700,000.  We’re waiting to see what new statements appear in next month’s mail.

Records were not properly kept and beneficiaries were not updated on several IRAs at various banks.  Now the process is delayed in probate.  The importance of reviewing and updating your will and/or beneficiaries is difficult to ignore, yet time and again people do.

Without properly named beneficiaries, wealth that you intended to give to loved ones may be subject to the delays, expenses, and public scrutiny associated with probate. In addition, the assets may not go to the right person, in the right amount, at the right time, which means you could potentially disinherit your heirs. With improper beneficiary designations, you also run the risk of allowing creditors access to your money.

Certainly you can take the time to make sure your IRA beneficiaries have been updated to reflect the proper distributions.  Each year, take an hour to:

  • Update your beneficiaries upon the following life changes
    • Marriage, Birth, Divorce, Remarriage
  • Name contingent beneficiaries, in case your primary beneficiary predeceases you
  • Review your Will

It is surprising how often this happens and how easy to avoid.  Every year, we make sure to address this with all of our clientele, and every year at least one of our clients needs to address this.  Do yourself a favor, and ask yourself:

If you die tomorrow, will your assets go to the right people?

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