Attorney & Mediator
Attorney & Mediator
Beneficiary Designations

Beneficiary Designations

Today, more of our assets and wealth are transferred via beneficiary designations than ever before. The transfers are outside of our Wills and Trusts and are not affected by the provisions of those documents. Therefore, it is important to understand the impact of these transfer provisions

Assets Involved: The transfer mechanism for retirement benefits such as IRAs, 401Ks, 457s, and tax-sheltered annuities are the beneficiary designations attached to each account. There are not affected by the language of your Will or Trust. It is important to check these to assure that they are correct.

If you are married, the primary beneficiary will be your spouse; however, there are secondary or contingent beneficiaries as well – those that would receive the assets if your spouse has died. Are these correct?

Many clients will state that they are leaving the retirement benefits to one child so that the bills can be paid and that the child will then distribute the money because he/she knows what the parents want. This is a risky manner to distribute these funds.

First, with retirement benefits, there is income tax associated with the with withdrawal of the funds. Therefore, the one child you name will incur the tax liability. Next, as a matter of law, once you name one child as the beneficiary, he/she is under no obligation to share any of the money with anyone. It goes directly to the beneficiary. While you may think that your children would not do this, or that your children will not fight over assets, the courts are clogged with cases of children fighting over assets.

If you want all of your children to share in the distribution of your IRAs or 401Ks, name each of them as a beneficiary.

The same advice goes for any other asset such as life insurance or bank accounts. Once you have passed away, the child beneficiary may decide to withhold all the money for him/herself.

Another designation is known as Payable on Death (POD) or Transfer on Death (TOD). These are utilized for bank or investment accounts. The individuals named will receive the account proceeds directly without using your Will or Trust.

These are important concepts to understand when doing your estate plan. If your will states divide all assets evenly among my children, but your beneficiary designations on your accounts state otherwise, it is the beneficiary designations that will control.

If you have three children and three CDs of equal value, wouldn’t it work to put one name on each? Only if you are not going to use the money in the CDs. Otherwise, if you use the money in CD number one first, and then half of the money in CD number two, one child will get the full amount, one will get half and one will get nothing.

Recognize also that in a Will or Trust, we place provisions concerning what happens if a beneficiary dies. This flexibility is not accorded to these beneficiary designations. It might well be up to the financial institution and its rules. Those rules will be interpreted according to the laws of the state in which the company conducts its business. Therefore, if a child dies, his share may or may not go to his children, irrespective of your wishes.

In conclusion, beneficiary designations have made estate planning easier but there are many pitfalls for the unwary. Make certain that you understand the implications.

When a loved one dies

When a loved one dies

When a loved one dies, it is a time of stress and emotional shock. Yet, the family must take steps to protect the estate.

Home: Change the locks and have the mail changed. Stop the delivery of newspapers. At the time of the funeral, ask a trusted person to be at the residence. The funeral times are often posted, and thieves take advantage of that to strike and clean out the home.

Limit Information in Death Notice: The less the better. If the deceased’s full name, place of birth, date of birth and death and parents’ names are given in the notice, it can give enough information for thieves to take advantage.

Notifications: Notify the Social Security Administration, the Veteran’s Administration (if applicable), banks, investment companies, credit card companies.

Locate the Documents: Locate and secure the estate planning documents. It is most important to locate the originals.

Estate Planning:  529 Plans for Children & Grandchildren

Estate Planning: 529 Plans for Children & Grandchildren

Whether you have a new child or grandchild, or they are a little older, it is probably a good time to think about options available for your children’s or grandchildren’s college education.

The 529 Plan is a college funding plan, sponsored by the state. It permits you to make cash contributions to this investment account and the earnings are not taxed federally so long as the withdrawal is made for qualified higher education expenses. Those would include tuition, books, supplies, computer equipment, and some room and board.

You may make gifts of up to $15,000 per recipient (or $30,000 for married couples) per year without triggering gift taxes without using any of your lifetime exemption. Additionally, 529 Plans permit you to “bunch” five (5) years’ worth of annual gifts into a single year. Therefore, you may gift $75,000 per recipient ($150,000 for married couples) in the first year. Once you do this, you may not make another contribution to the plan until year #6.

There are a few disadvantages. One is that the contribution must be cash. You cannot gift stocks or real estate. Additionally, the money may be counted if the student is seeking financial aid.

If the child or grandchild decides to forego college, the beneficiary can be changed to another child or grandchild.

While a 529 Plan may not be ideal for everyone, it merits a closer look when you are planning for your child or grandchild’s future.

Estate Planning – Getting Ready to Retire?

Estate Planning – Getting Ready to Retire?

You have met with your financial advisor and determined that you are ready economically to retire. The finances are in place. You are already planning how to spend your newly created free time.

Have you updated all of your estate planning documents and made certain that all of your legal matters are ready for this next phase of your life?

I know that many people are very private about their financial and personal information. I urge you to share information with your children even if it feels uncomfortable. They will be able to assist you in getting all your matters organized. In so doing, they will then be able to help you in the future when you need that help.


Make a listing of all accounts, where they are held. Check to see if there are the appropriate transfer on death or beneficiary designations on the accounts. Don’t assume that you did it. Check!

This might be a good time to streamline your finances – make it easy on yourself. Consolidate accounts to one bank and one financial adviser. This will make administration easier and it will give you a better idea of what you own.

This is a good time to streamline bill paying. Set up automatic bill paying where possible. You can still check your statements monthly, but it will eliminate the need to keep track of all the due dates.


If you have insurance, this is the time to review. Are the policies appropriate? Are you over or under insured? Are the correct beneficiaries on each policy?

If you are uncertain, set up a meeting with your insurance advisor to review the policies.

Legal Documents:

When was the last time you looked at your estate planning documents? Review all of them. Are the choices you made when you executed the documents the ones that you want today? Maybe things have changed.

Do you have up to date Durable Power of Attorneys and Patient Advocate Designations? These are so important. Without them, your family may have to go to the Probate Court to obtain a Guardianship or Conservatorship in the case of an emergency. This takes time and money.

Is your Will or Trust up to date? Take a look. Are the distributions correct? Are the agents (Personal Representative or Trustee) appropriate?

Living Arrangements:

What is your plan as you age? Is your current living situation working? What would you want to do if you became ill and could not live independently?

It is important to discuss this with your family members. They should be informed as to your wishes. Without that knowledge, they cannot assist you in the way you would want.

Is there money to pay for an illness contingency? You need a plan.

Medical Information:

Make a listing of all your doctors, their addresses and phone numbers. Also list what they are treating you for.

Make a listing of your medications and the dosage. These are important facts your family may need to pass on in the case of an emergency hospitalization.

Make copies of your health care cards.

Discuss with your family what your treatment wishes are – today while you are healthy. Let them know what you want and what you do not want. It simply is not fair to leave them guessing.

By taking the time to organize this information and share it with trusted family members, you will be positioning yourself for a steady future.

Then, next step – Retirement.

Estate Planning: How much should I tell my children?

Estate Planning: How much should I tell my children?

This is a question that I get quite often. There is no correct answer.

First, your assets are your business. You have no obligation to tell your children how you are spending your money, nor to tell them how you plan on distributing those assets at your death.

Next, legally, you do not have any requirement to give your assets to your children upon your death. You cannot totally disinherit your spouse, however, you can leave your children either individually or collectively nothing. It is not their inheritance until you have passed away.

This leads to the issue of what to tell your children. If you are going to give them copies of your estate plan, then you need to continue to do this as you update the plan. Children who believe that they are getting a certain percentage of an estate because they saw a Will or a Trust years ago will be difficult and angry if the plan was changed, they did not see the changes, and they get less upon the distribution of the estate. This is the type of situation that leads to litigation. Therefore, if you distribute copies of your Will or Trust to your children, make sure that you keep them updated as you make changes.

If you choose not to give them copies of your estate planning documents, what do you tell them? Simply inform them that you have had an estate plan prepared and where you have secured the original of the Will or the Trust.

If you are planning on giving some of your estate to charity or to friends, you might want to mention this fact to your children. Again, surprises are the situations that create anger and litigation. If your children know that you will be giving some of your estate to charities or friends, they may not like it, but they will learn to accept it.

Consistency is the key.



Clients often ask this question. Certainly, you should look at the documents at least every five years. As you read through your trust or will, durable power of attorney and patient advocate designation, you should ask yourself the following questions. Has anything changed? Do I still want to appoint the same people? Are these the people that I want to give my estate to?

Also, you should review all of your estate planning documents when any of the following happens:

· Marriage, divorce or death of a spouse

· Birth of a child

· Your children become financially independent

· Birth of a grandchild

· You have a new business venture

· A substantial growth in your business

· Job promotion or change in jobs

· Retirement

· Purchase of Life Insurance

· Move to a different state

· Substantial increase or decrease in your wealth

· Decision to make large charitable gifts

· Increase in risk of being subject to a lawsuit

· Substantial amounts of property in joint names

· Purchase of real estate in another state

· You inherit a large estate



Most young people do not think about executing Wills. They usually owe more than they own. This can especially be true for the young married couple.

When they have a child of their own, it is time for some thoughtful consideration of their child's future. If something happened to them, who would care for their child.

Tom and Nancy were married and had a child, Max. Nancy had been raised in a very strict family. Her parents were affluent. She had a difficult relationship with them – they had not approved of her selection of Tom as a husband, nor of her choice of a profession – social work. Nancy did not look upon her childhood fondly – she felt that it had been too strict, her parents too judgmental and controlling.

Tom's family was large and easy going. He had a great childhood and a really close relationship with his brothers and sisters and his parents. Although they live in another state, Tom and Nancy see them frequently and check in with them weekly on the telephone. Tom's choice to be a teacher made his parents proud.

Tom and Nancy did not execute a Will – they had little – a new home with a mortgage, cars with loans, little in the bank. If asked, both Tom and Nancy would have desired that Max live with Tom's parents or one of his siblings if anything were to happen to them. This was not written down. Tom and Nancy were killed in an automobile accident when Max was only five years old.

Since they lived locally, Nancy's parents immediately took Max into their care. Additionally, they filed Probate proceedings for Nancy's estate and for Guardianship of Max. While Tom's parents also requested to be considered for Guardianship of Max, they were out of state and had few monetary resources. Issues for the court to consider included whether it would be good for Max to be removed from the school and the community that he lived in to be taken across the country when there were relatives here ready and willing to raise him.

How could this have been avoided?

Tom and Nancy should have executed simple Wills. While a young couple may not have many monetary assets to worry about, their most important "asset" – their son – was at risk. A Will sets forth who a couple wants to be the guardian and the conservator of their children in the event of their death. While most never face this situation – it does happen. It is worth taking the time to make provisions for children in the event of their parents' death.

ESTATE PLANNING: How to Choose a Personal Representative.

ESTATE PLANNING: How to Choose a Personal Representative.

When you are establishing a Last Will and Testament – one of the issues that you confront is the selection of a Personal Representative. If you are part of a couple, you will usually select one another. Yet, you really need to select an alternative to serve if the person you have chosen is not able to serve.

While it may seem logical to select a family member to serve in this capacity – his or her expertise will determine how quickly and/or smoothly the process is completed. If the individual selected has limited bookkeeping or money management skills or is very busy – the process could be slowed down. Additionally, the selection of one family member could place him or her in the middle of a family disagreement.

If the assets of the estate are depleted without leaving sufficient funds to pay the inventory fee or the estate taxes, the Personal Representative could be personally liable.

It should be remembered that this is less of an honor and more of a job than most people anticipate. It is time consuming and it is an enormous responsibility.

The qualities of a good Personal Representative include:

· Trustworthy – this individual will be entrusted with property and cash assets

· Fair – he or she should not show favoritism to one beneficiary over another

· Common sense – this is a must – the individual should show practical common sense for getting the job done

· Strong and/or tough – this individual may be placed in the center of debates and arguments concerning the distribution of your estate and he or she must be able to make the hard decision and stick with it.

ESTATE PLANNING: Joint Tenants - is this enough protection?

ESTATE PLANNING: Joint Tenants – is this enough protection?

Some individuals hoping to avoid the probate court process make their relatives joint tenants upon their assets. I see this commonly for an elderly parent who is single and wishing to avoid probate. He or she will make one child joint on a checking account, another on a savings account and all the children joint on the house.

Will this work? It can and does work effectively much of the time; however, you should be aware of the risks.

For real property such as your home, you are giving away a valuable property right by making someone a joint tenant. While you are doing this for estate planning purposes, that is not the way the law sees it. That joint tenant now has as much right to the property as you do – the right to use it, the right to encumber it.

Most often the issue will come up with a home in an attractive location such as lakefront property. Having placed the property in joint tenancy with children, the parent is now required to ask their permission to sell the property if they no longer feel that they can care for the property. If these children were counting on the fact that this property would be available for their use into the future, they may refuse to sign a purchase agreement or a deed.

Also of concern for jointly held assets, whether cash or real property, is the fact that the joint tenant child could have creditors – perhaps he or she has a business that goes awry or is involved in an accident that is not entirely covered by insurance. The creditors of that child will seek payment of the judgment from your money.

While the Joint Tenant method of estate planning may save you money today – it could cost you valuable assets in the future.

Estate Planning - After the Divorce

Estate Planning – After the Divorce

At the conclusion of a divorce proceeding, both parties are sick of the legal system, lawyers and legal fees. This is understandable. None the less, it is important to address a change in your estate planning documents immediately after the divorce is final.

During your marriage – you had joint ownership of many assets which has now been dissolved. You named one another as the Personal Representative of your estate upon your death, the agent under your Durable Power of Attorney and the Patient Advocate under your Designation of Patient Advocate (Medical Power of Attorney).

Do you really want your ex-spouse to serve in these capacities?

It is time to select new agents for each of these estate planning documents. You will want your health care and finances to be controlled by someone else in the event of your incapacity. As a now single individual, there is no one that has any authority to assist with your medical issues unless you draft and sign a Designation of Patient Advocate (Medical Power of Attorney).

For individuals with minor children, there are post-divorce estate planning concerns as well. You cannot name a third party as the guardian of your child upon your death instead of the remaining parent. Your ex-spouse will have the first opportunity to raise your child(ren) if you die prior to their 18th birthday unless he/she is unavailable, doesn't chose to do it, or is totally unsuitable due to prior abuse or serious criminal activity.

You can, however, name a conservator for your children. This individual would be responsible for the money you leave for the care of these children. Unless you would like your ex-spouse to control the money, it is important to name someone who would be willing to assume this duty and would do it honestly and carefully.

During your divorce, you became independent and you negotiated for your fair share. It is important that you assure that your fair share is passed on to those you choose.