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Author: RBMunkin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5746  
Subject: Will bequest vs. account beneficiary designation Date: 3/13/2012 4:42 PM
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Hi,

I just want to make sure I have this right if anyone here knows for sure.

If I have a beneficiary designation on my brokerage accounts leaving most to my wife but a small percentage to a charity, and on my will I leave everything to my wife, I believe the account beneficiary designation will rule, right? The charity will still get their percentage. My will simply gives everything else that does not have a specific designation (residual estate I think this is called) to my wife.

I'm using Willmaker software and want it as simple as possible.

Is this correct?
Thanks,
RB
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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5603 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 5:25 PM
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If I have a beneficiary designation on my brokerage accounts leaving most to my wife but a small percentage to a charity, and on my will I leave everything to my wife, I believe the account beneficiary designation will rule, right? The charity will still get their percentage. My will simply gives everything else that does not have a specific designation (residual estate I think this is called) to my wife.

Correct. A beneficiary on an account takes precedence over a will because by having a beneficiary on the account, you have removed the account from the probatable estate, and so the will does not come into play relative to that account. The will only handles assets that are handled via probate.

That said, I prefer to pay an estate planning attorney to draw up estate documents because I think that covers all the bases better. This is just not a place that I'm willing to be penny-wise and pound-foolish, so I'd still recommend seeing an attorney to make sure you are doing what you want, and that it is valid in your state.

I've seen too many debacles from well-meaning people who try to do DIY estate planning.

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Author: RBMunkin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5604 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 5:35 PM
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Thanks for the info.

I think my situation is so simple, pretty much as simple as you can get, that things won't go awry. Almost all of my assets are in brokerage accounts and I have my wife and a charity as beneficiaries.

We have no kids.

Two houses - one a rental - are in both our names so that'll be a no-brainer when one of us dies.

The will leaves everything to her but that isn't much. Household stuff like books and furniture.

So I don't even see a need for probate at all. No one is going to question her getting my books and stuff! No one would even know if they were mine or hers. It's just stuff in the house.

And just in case, the will will show all this stuff being left to her.
We practically don't need a will! But we'll at least have a DIY one.

RB

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5605 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 6:26 PM
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And just in case, the will will show all this stuff being left to her.
We practically don't need a will! But we'll at least have a DIY one.


Oy vay.

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5606 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 7:20 PM
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RBMunkin: "Two houses - one a rental - are in both our names so that'll be a no-brainer when one of us dies."

How so? How are the houses titled? Are the community property? Or separate property? Or to you hold title by the entireties? Or perhaps as tenants in common?

"The will leaves everything to her but that isn't much. Household stuff like books and furniture.

So I don't even see a need for probate at all."


I am still curious about the real estate. In addition, do you own a car/truck/SUV or more than one? How are those titled.

Who will be the executor? Will you have enough funds in the estate for the executor to cover the expenses of the estate or are you expecting the executor to pay out of pocker?

Regards, JAFO

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Author: RBMunkin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5607 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 7:28 PM
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"Oy vay."

That's helpful LOL! All kidding aside, I've seen family and friends with similar situations have ZERO problems with simple estates like this.

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Author: RBMunkin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5608 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 7:38 PM
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Everything is titled appropriately. The houses and cars are automatically the surviving spouses. The surviving spouse will be the executor.

If we both die together, we don't really have a great option for an alternate executor. But gee, I honestly don't care much in that case! Our siblings will get the bulk via alternate beneficiary status. They might have to do some work to get the houses and cars. That'll be up to them. But it shouldn't be THAT much of a problem since they are in our wills. And what are the odds we both die at the same time? Negligible. I'll ask one of my brothers to be an alternate executor.

I'll be dead! I'm not going to bend over backwards and worry about this too much. I'm just trying to put it mostly in order. And I believe it's 98% there with beneficiaries indicated and a simple will. Oh, and health care directives. We have those also.

If I had kids it would be a different matter. This is mostly for my wife. If we don't die at the same time I think we are all set. Everything is owned jointly except retirement accounts which can't be. Those have beneficiary designations.

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5609 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 8:13 PM
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My response is definitely colored by my experience. You own all real estate ? No mortgages ?

Who will make medical and financial decisions in case you are both alive but incapacitated ?

Not sure how cars can automatically go to the surviving spouse but that was about the only issue I didn't have to deal with.

Each have credit cards in your own names ?

If you are dead and she is not, will she know where everything is and what to do ? Will she have access to enough money in her own name to pay bills for a few months ?

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Author: RBMunkin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5610 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 8:40 PM
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Houses AND cars in both names.
Credit cards also.
EVERYTHING. I did it this way for many years on purpose.

We don't have anyone to make decisions if we both are incapacitated. It's good to do what one can but the bottom line - life is uncertain. You can't insure against EVERY potentiality. No kids, no family in the area, not much we can do about it besides health care directives. The odds are just not there that we'd both be incapacitated at the same time. And if one gets so, then other plans can be made and changed.

Yes, she will know more or less. I have written it all up with names, numbers, account numbers, how to access it all via Quicken, on and on. Yes, she will have plenty of dough for a long while. Both our checking accounts are in both names. Again, I did it all like this over many years on purpose.

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5611 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/13/2012 9:55 PM
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Credit cards also.
Who is the primary on the credit cards? If it's always you, then there is a significant chance that she will be left with no credit cards and no way to get any because all the credit is in your name.

I've always made sure that DH has at least one card in his own name, and I have at least one card in my own name so that we each have our own credit history and credit score. I have an aunt and a cousin who were both widowed with young children, so I've seen first hand what things can look like if you don't have all your ducks in a row.

Simple wills are really inexpensive to have done by a lawyer. I'd pay the couple of hundred dollars to at least have them review what you have done to make sure that it works like you think it does in your state, and that you are not potentially leaving you or your wife with something different than you intend.

I get the part about not caring what happens if you both die together, but I'd want to be completely sure that my spouse was taken care of, and I would spend some money to ensure that.

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5612 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/14/2012 2:38 PM
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Another person in our office is dealing with a case of a single man, no kids, 3 siblings, owned a house. No will, that they could find. So the 3 siblings are the heirs.

It seems no one has the authority to cancel his cell phone and cable service, or his newspaper subscription, at this point. Much less pay any bills.

Well, eventually these things do get sorted out. What will happen is the 3 siblings decide who they want to be the personal rep., and hire a lawyer to petition the court to appoint him/her as such.

Always have a will. It's just easier.
Bill

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5613 of 5746
Subject: Re: Will bequest vs. account beneficiary designa Date: 3/15/2012 9:29 AM
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Well, eventually these things do get sorted out. What will happen is the 3 siblings decide who they want to be the personal rep., and hire a lawyer to petition the court to appoint him/her as such.

Always have a will. It's just easier.


In MA, you also have to post a bond to be named Executor, so it could end up costing someone money because if you don't have the money for a bond, you have to pay a bonding service to get that, and I'm not sure that the estate would be responsible for that expense.

Also, if anyone contests the distribution of the estate, then the estate gets to pay all the legal fees.

Oh, and in MA, the executor can also be paid to administer the estate, so it's possible for someone who is not an heir, for instance, to be the executor and actually get paid more money than eventually gets distributed.

We're going through all sorts of fun now both with estates where wills existed and where a will did not exist. I wouldn't do this to anyone, least of all someone I care about.

Get a will. It's so much easier.

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