Putting Correct Benificiarys Down On Retirement Accounts

[Icc5]

Make sure you follow thru as soon as possible. This was a 457 plan but it would also effect 401k's and other similar programs. They cannot go in your Trust so protect your loved ones.
My oldest brother was a bus driver and has a 457 plan. He put his 4 siblings on it years ago. He never listed others like wife's or kids so when he passed it created a real dilemma. Our youngest brother died a year before. The oldest who's account this was passes this past July.
When we went to check his account the total gets divided between the 3 of us remaining. His wife and kids get nothing because they were not listed. We will find a way with other funds to equal everything out but it becomes hard this this account was a taxable one.
Another account the court has to have a petition to the court to be put into his trust so we can keep it out of probate since he put no beneficiaries on it.
If you care about family please take the steps now to make it easier on them later.
Bart

 

[bogey21]

Good common sense advice. When a number of years ago I had to be the borrower (and therefore the deeded owner) on my Son's house because of his lack of credit one of the first things I did was change my will so that his house (that was in my name) went to him if I died. Why people with changes in their relationships, marriages, divorces, etc. don't immediately change beneficiaries on life insurance policies, brokerage accounts, bank accounts, retirement accounts, etc. is beyond my comprehension...

George

 

[Talent312]

This touches a nerve...
Failure to change a beneficiary after a significant life event, such as divorce from the named-beneficiary, can have very unfortunate effects. In my family's case, 40 years ago, it meant that a divorced stepmother rec'd my dad's life insurance proceeds, instead of his 3 children. Her justification for keeping the proceeds: "He must've wanted me to have the money." -- No one except her thought so.

 

[AnnaS]

If it weren't for the taxable aspect of it, I would have just handed the funds to the wife and children - so I guess you are saying there is a lot of work involved to give it to the proper beneficiaries. Of course there would be and should be......for various reasons.

It's a great reminder. I told my sons the same thing when they married. Before they were married and working full-time, they did the same. They both listed each other (and my daughter) as beneficiaries. BUT, you have reminded me to make sure I mention this to them AGAIN (they are married with children).

The Trust and Will mean nothing and no one wants/needs to see it when it comes to handing money to beneficiaries.

My three kids are all listed as beneficiaries in our accounts, IRAs and annuities. When husband and I are both gone, all they need to do is go to the banks with the death certificate. They will each get their share listed (all even). I have done this already with my parents and my sister. The house is a different story.....need to take care of this soon too (should have already not to create extra work/hassle for them).

This is definitely a good reminder.

 

[rapmarks]

My son in law died suddenly at forty. He was estranged from my daughter. He loved their three little boys. He didn’t do paperwork and passed the insurance form to his brother. His brother made himself beneficiary and kept the proceeds and refused to pay for the funeral.

 

[Talent312]

My son in law died suddenly at forty... He was estranged from my daughter. He loved their three little boys... His brother made himself beneficiary and kept the proceeds and refused to pay for the funeral.

We would hope our dear departed would take more care with their assets.
But more so, that survivors would not behave like carnivorous dogs. <sigh>
.

 

[AnnaS]

My son in law died suddenly at forty. He was estranged from my daughter. He loved their three little boys. He didn’t do paperwork and passed the insurance form to his brother. His brother made himself beneficiary and kept the proceeds and refused to pay for the funeral.

Sad.........he should have paid for the funeral and given the money to the kids.........

 

[bogey21]

Who knows what goes through a person's mind as end of life nears and who knows what others will do in their self interest. I solved the problem by essentially giving all my assets to my kids and ex-wife 19 years ago. Any money that is left over is in Bank Accounts with my kids JTWROS. When I die they own it. No estate, one small Life Insurance policy to cover my cremation and no beneficiaries to fight over the chump change I have left...

George

 

[MULTIZ321]

Who knows what goes through a person's mind as end of life nears and who knows what others will do in their self interest. I solved the problem by essentially giving all my assets to my kids and ex-wife 19 years ago. Any money that is left over is in Bank Accounts with my kids JTWROS. When I die they own it. No estate, one small Life Insurance policy to cover my cremation and no beneficiaries to fight over the chump change I have left...

George

Hi George,

I'm curious, what happens to your horse(s)?

I might have asked you this before but if so, I forget your answer.

Best Regards.

Richard

 

[Icc5]

The biggest take I would hope people would get from this is when my youngest brother passed away a year ago (suicide) it was totally unexpected. By not listing the next in line beneficiaries they get completely left out. This was not the intent at all but it is how accounts such as 401k's , 457s and other of these type accounts work. These type of accounts don't or shouldn't be put in Trusts either. So, the best way to avoid this would be to put a spouse down and if kids list them after the spouse so if the spouse Aldo dies it then goes to the kids. Do it in the proper order if you don't want it shared with all.
In my case it goes to my wife and if she passes it is split between my 2 kids and if they all pass it goes to my grandaughter. In California at least you want to keep things out of probate which cost a fortune and can go on forever before funds are released.
Bart

 

[bogey21]

I'm curious, what happens to your horse(s)?
Richard

Three of them are in Partnerships. If something happens to me, all my kids have to do is call the Partnership Manager and ask him to sell my share which at the right price is easy. The two I own 100% are located at a Training Center in Maryland. I have introduced my Brother, who lives about 40 miles away in Southeastern Pennsylvania, to my trainer. Between them they should be able to get them sold if something happens to me. At distress pricing this too is reasonably easy. Thus I think I have this covered...

Note that race horses are much like a lot of TimeShares in that they are more liabilities than assets...

George

 

[Sugarcubesea]

I had one of my employees 3 days before her death calling me to add a beneficiary to her 401K and Life Insurance. No one should be worrying about that as they are dying.

 

[Talent312]

I had one of my employees 3 days before her death calling me to add a beneficiary to her 401K and Life Insurance. No one should be worrying about that as they are dying.

Better sooner than later, but at least they got it done before it was too late.

 

[Quiet Pine]

DH is the primary beneficiary of my IRA and my 2 kids are the secondary (or contingent) beneficiaries.

Some years ago I had a client whose husband died. His former wife still was the beneficiary of his IRA. I talked to her, and she was willing to forgo the money but was very concerned about how she would be taxed for handing over a couple of hundred thousand dollars. It was a mess!