Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this wise?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Luckywon
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Luckywon »

baconavocado wrote: Sun Aug 01, 2021 8:02 pm
FIREchief wrote: Sun Aug 01, 2021 7:55 pm
gwe67 wrote: Sun Aug 01, 2021 3:25 pm How do you know the new spouse won't change beneficiary designations later, leaving you with nothing? It has happened. With most institutions, all she needs is login credentials.
How on earth would anybody obtain my login credentials? It's not like anybody would actually write down their passwords, right? :twisted:
This seems to be the most obvious weakness in the plan.
I must say that based on my experience with an n of about 5, for seniors not very accustomed to computers, the password to every financial account is on a sticky within arms reach of the computer. :oops:
Joey Jo Jo Jr
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Joey Jo Jo Jr »

Is raising a family without ever buying term life insurance a sound strategy? After all, the odds are very good you could save yourself some money and hassle doing without it. The only problem is when your plan blows up the downside is often quite bad.

Also, one thing a will can do in many states is to provide evidence of the decedent’s intent if things get wonky with some near death beneficiary changes (assuming you would reference the beneficiary designations in the will). I feel like people discount the “insurance” aspect of a solid estate plan.
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FIREchief
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by FIREchief »

Luckywon wrote: Sun Aug 01, 2021 8:11 pm
baconavocado wrote: Sun Aug 01, 2021 8:02 pm
FIREchief wrote: Sun Aug 01, 2021 7:55 pm
gwe67 wrote: Sun Aug 01, 2021 3:25 pm How do you know the new spouse won't change beneficiary designations later, leaving you with nothing? It has happened. With most institutions, all she needs is login credentials.
How on earth would anybody obtain my login credentials? It's not like anybody would actually write down their passwords, right? :twisted:
This seems to be the most obvious weakness in the plan.
I must say that based on my experience with an n of about 5, for seniors not very accustomed to computers, the password to every financial account is on a sticky within arms reach of the computer. :oops:
Yeah. I know. And, based upon many forum posts, it extends far beyond the old, frail and computer challenged. I've read countless posts by folks proudly stating that they've made arrangements for others to have their usernames/passwords if/when "needed." :oops:
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Katietsu
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Katietsu »

I think there are two separate answers.

Is this a good plan? Others have already addressed that BH forum members are of the type to say NO.

Will this plan likely work out? Yes. It will likely work out. The wife will likely survive the much older spouse. The kids will likely survive Dad. The beneficiary designations will likely result in the intended inheritances.

But, a good plan would take into account the less likely scenarios.

I have had a parent and in law pass away with either no will or with a will that never left the desk drawer. Everything was handled with joint ownership or with beneficiary designations.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Dottie57 »

teuton33 wrote: Sun Aug 01, 2021 3:41 pm
JoeRetire wrote: Sun Aug 01, 2021 3:39 pm
teuton33 wrote: Sun Aug 01, 2021 3:14 pm My father is 78 years old. He remarried to someone much younger (55). They have been together for 10 years. He’s leaving the house valued at ~1m in a HCOL to the new spouse as well as 300-400k of retirement accounts. The rest of his accounts (300k in Roth and 1.2m in taxable) he intends to leave to my sister and I split 50/50.

He intends to have this coordinated purely through designated beneficiaries on the various accounts. He has no plans for a will or anything else like that.

Is this a sound strategy?
No.
Why?
Check to see how much a spouse is entitled to according to state law. Sometimes it is 1/2 of assets and sometimes 1/3 or something else. This could get into a legal fight. Also Personal property like house contents, cars, etc are usually dispersed by will. It really is not smart to le@ve this life without a will.
heyyou
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by heyyou »

With all that could happen, I doubt that a lawyer would ever say that "not having a will" is adequate. Thus, asking the lawyer, will not get an unbiased opinion.
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ThereAreNoGurus
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by ThereAreNoGurus »

I might have missed it. Scanned the thread, but I did not see the state your father resides in.

For example, if it's California, I believe not putting his assets into a living trust would be a mistake. Without the living trust, I'm pretty sure the estate goes through probate which has hefty fees in California. But again this is going to vary widely depending on the state your father resides. And again I'm no expert on this subject. Or maybe it does not go to probate since his wife would inherit the estate and beneficiaries are named on the brokerage accounts??? Again, as others have recommended a visit to an estate lawyer would be a worthy investment.

I noted that Gil has posted above. He is qualified to comment more accurately.
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rehoman
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by rehoman »

bsteiner wrote: Sun Aug 01, 2021 4:54 pm
Gill wrote: Sun Aug 01, 2021 4:07 pm Who will pay the debts, funeral and administration expenses of the estate? He might die with an asset such as a judgment for his wrongful death which will be disposed of by the intestate laws of his state. His spouse might have a right of election against all the assets of the estate. For someone with those assets to intentionally elect to have no will is just plain foolish.
Agreed. Also what if one of the beneficiaries predeceases him? Also what if there’s a reasonable chance one of his children might get divorced, outlive his/her spouse and remarry, have a taxable estate, have creditors, or want Medicaid? Leaving the children’s shares in trust rather than outright will better protect their inheritances.

It may be worth spending a few thousand dollars to protect against these possibilities.
Absolutely he should spend the money and have a will. A TOD designation can be a beautiful thing, but things can go wrong. What happens if you predecease him, as bsteiner points out? Problem might be solved if it is TOD "per stirpes". But last time I checked Vanguard does not allow a "per stirpes" designation (Fidelity still does, I believe.) A will is a must!
Vanguard investor since 1984.
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FIREchief
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by FIREchief »

rehoman wrote: Mon Aug 02, 2021 12:17 am
bsteiner wrote: Sun Aug 01, 2021 4:54 pm
Gill wrote: Sun Aug 01, 2021 4:07 pm Who will pay the debts, funeral and administration expenses of the estate? He might die with an asset such as a judgment for his wrongful death which will be disposed of by the intestate laws of his state. His spouse might have a right of election against all the assets of the estate. For someone with those assets to intentionally elect to have no will is just plain foolish.
Agreed. Also what if one of the beneficiaries predeceases him? Also what if there’s a reasonable chance one of his children might get divorced, outlive his/her spouse and remarry, have a taxable estate, have creditors, or want Medicaid? Leaving the children’s shares in trust rather than outright will better protect their inheritances.

It may be worth spending a few thousand dollars to protect against these possibilities.
Absolutely he should spend the money and have a will. A TOD designation can be a beautiful thing, but things can go wrong. What happens if you predecease him, as bsteiner points out? Problem might be solved if it is TOD "per stirpes". But last time I checked Vanguard does not allow a "per stirpes" designation (Fidelity still does, I believe.) A will is a must!
Still?? Isn't that a core element of beneficiary designation options at all but the most archaic of brokerages?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Phaethon
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Phaethon »

FIREchief wrote: Sun Aug 01, 2021 8:17 pm
Luckywon wrote: Sun Aug 01, 2021 8:11 pm
baconavocado wrote: Sun Aug 01, 2021 8:02 pm
FIREchief wrote: Sun Aug 01, 2021 7:55 pm
gwe67 wrote: Sun Aug 01, 2021 3:25 pm How do you know the new spouse won't change beneficiary designations later, leaving you with nothing? It has happened. With most institutions, all she needs is login credentials.
How on earth would anybody obtain my login credentials? It's not like anybody would actually write down their passwords, right? :twisted:
This seems to be the most obvious weakness in the plan.
I must say that based on my experience with an n of about 5, for seniors not very accustomed to computers, the password to every financial account is on a sticky within arms reach of the computer. :oops:
Yeah. I know. And, based upon many forum posts, it extends far beyond the old, frail and computer challenged. I've read countless posts by folks proudly stating that they've made arrangements for others to have their usernames/passwords if/when "needed." :oops:
What's wrong with that? I'm actually in the process of having a new estate plan drawn up in my current state as opposed to the state where the current plan was drawn up. I'm securely providing my 1Password Emergency Kit to my new estate attorney to give to my sister, who is the executor of my will and primary beneficiary of my Trust, if I get hit by a truck or something so that she can access all of my accounts (2FA issue notwithstanding; need to look into a Yubikey).
lakpr
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by lakpr »

Phaethon wrote: Mon Aug 02, 2021 4:06 am What's wrong with that? I'm actually in the process of having a new estate plan drawn up in my current state as opposed to the state where the current plan was drawn up. I'm securely providing my 1Password Emergency Kit to my new estate attorney to give to my sister, who is the executor of my will and primary beneficiary of my Trust, if I get hit by a truck or something so that she can access all of my accounts (2FA issue notwithstanding; need to look into a Yubikey).
Issue is that, once the bank/ credit union/ brokerage firm knows you are dead (they scan the social security list of dead people, your funeral home or hospital where you died is obligated to inform SS), they lock the accounts. To be opened only to estate executors. Your username / password / Yubikey would all be useless then.
Phaethon
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Phaethon »

lakpr wrote: Mon Aug 02, 2021 5:38 am
Phaethon wrote: Mon Aug 02, 2021 4:06 am What's wrong with that? I'm actually in the process of having a new estate plan drawn up in my current state as opposed to the state where the current plan was drawn up. I'm securely providing my 1Password Emergency Kit to my new estate attorney to give to my sister, who is the executor of my will and primary beneficiary of my Trust, if I get hit by a truck or something so that she can access all of my accounts (2FA issue notwithstanding; need to look into a Yubikey).
Issue is that, once the bank/ credit union/ brokerage firm knows you are dead (they scan the social security list of dead people, your funeral home or hospital where you died is obligated to inform SS), they lock the accounts. To be opened only to estate executors. Your username / password / Yubikey would all be useless then.
Specifically for Fidelity, perhaps, but not all of my other accounts, e.g. Amazon, Microsoft 365, this forum. :P Plus my estate plan includes DPOA so my sister (again also being the executor) would be able to provide that anyway for account information, etc.
lakpr
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by lakpr »

Phaethon wrote: Mon Aug 02, 2021 5:40 am Specifically for Fidelity, perhaps, but not all of my other accounts, e.g. Amazon, Microsoft 365, this forum. :P Plus my estate plan includes DPOA so my sister (again also being the executor) would be able to provide that anyway for account information, etc.
True, accounts at non financial institutions may still be open after your death, but do you truly think your sister would want to use your Amazon account and your Bogleheads forum handle, rather than creating her own? I can see some value in sharing the Microsoft Office 365 password, may be you want to share your thoughts in an Office Word file that you want your sister to open in the event of your death .... even that is iffy, could you not share it ahead of time, sans passwords?.

But if it floats your boat, so be it...
Phaethon
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Phaethon »

lakpr wrote: Mon Aug 02, 2021 5:49 am
Phaethon wrote: Mon Aug 02, 2021 5:40 am Specifically for Fidelity, perhaps, but not all of my other accounts, e.g. Amazon, Microsoft 365, this forum. :P Plus my estate plan includes DPOA so my sister (again also being the executor) would be able to provide that anyway for account information, etc.
True, accounts at non financial institutions may still be open after your death, but do you truly think your sister would want to use your Amazon account and your Bogleheads forum handle, rather than creating her own? I can see some value in sharing the Microsoft Office 365 password, may be you want to share your thoughts in an Office Word file that you want your sister to open in the event of your death .... even that is iffy, could you not share it ahead of time, sans passwords?.

But if it floats your boat, so be it...
This is for when I'm dead, so it's for her to be able to manage and close the accounts.
Freetime76
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Freetime76 »

OP: yes your dad's estate would be better off with a will. Use it to name an executor, define final instructions, and as a safety net in case something is missed by the TOD/POD. Easily, there are countless scenarios where the will kicks in, many already mentioned by others.
- A named beneficiary might die, and he is unable to update his accounts.
- A long lost or newly opened account or asset might show up.
- They missed something important, such as the deed to the house or a safety deposit box.
...just Google for dying without a will stories. Entertaining except there are actual people involved.


Now, actually convincing him and getting it done? I hope it’s easy.
Look, most people *don’t* have a will (or maybe can’t find it)! We all die eventually, thus, most people die without a will. Such as it is... My spouse and I updated our wills after moving to a new state, and - even knowing that I’m likely to die that week and the importance of it - I still :shock: felt very weird handling the thing.

Whatever your dad decides, at least he’s talking to you about it.
Please spell out new acronyms. Thank you.
OpenMinded1
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by OpenMinded1 »

JoMoney wrote: Sun Aug 01, 2021 3:23 pm
Nyc10036 wrote: Sun Aug 01, 2021 3:18 pm Are the taxable accounts bank accounts which can have Transfer On Death provisions?
I have taxable mutual funds and I don't see a way to have that same sort of arrangement.
It probably depends on where you're holding your funds, but Vanguard, Fidelity, and others offer named beneficiary Transfer On Death for normal taxable accounts.
https://investor.vanguard.com/beneficia ... retirement
T. Rowe Price also offers TOD for taxable accounts.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by BarbBrooklyn »

Order your dad this book:

https://www.google.com/search?gs_ssp=eJ ... e&ie=UTF-8

Us "kids" have little to no ability to sway our parents' minds. Sometimes an outside "expert" can do so.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
Aged Maduro
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Aged Maduro »

No, this is not wise. It is a recipe for disaster.
oyster99
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by oyster99 »

lakpr wrote: Mon Aug 02, 2021 5:38 am
Phaethon wrote: Mon Aug 02, 2021 4:06 am What's wrong with that? I'm actually in the process of having a new estate plan drawn up in my current state as opposed to the state where the current plan was drawn up. I'm securely providing my 1Password Emergency Kit to my new estate attorney to give to my sister, who is the executor of my will and primary beneficiary of my Trust, if I get hit by a truck or something so that she can access all of my accounts (2FA issue notwithstanding; need to look into a Yubikey).
Issue is that, once the bank/ credit union/ brokerage firm knows you are dead (they scan the social security list of dead people, your funeral home or hospital where you died is obligated to inform SS), they lock the accounts. To be opened only to estate executors. Your username / password / Yubikey would all be useless then.
NO. They absolutely DO NOT proactively lock accounts once the name appears in the SS death register.

Only when an inquiry is made to them will they then immediately lock the accounts.
That's why you (if you are executor/trustee, or a TOD/POD beneficiary) need to think carefully about the timing and sequence of these notifications, so that things can continue to be paid or autopaid, and accounts and debts and refunds can be methodically wrapped up as events of the estate administration unfold (sometimes in unexpected ways where this flexibility is valuable).

This goes for banks, brokerage accounts, retirement accounts, insurance accounts, credit cards, mortgages, monthly services, and basically everything. Think about the problems it would cause if these entities were to just proactively lock everything the moment the SS death register entry appears (which would likely be before any funeral arrangements were even contemplated, let alone all the other tasks that need to be accomplished to wrap up an estate over the subsequent months). So there is logic behind not locking accounts until someone familiar with the estate plans choses to notify them.

EDIT to add: I guess I can't say that it will never happen that some entity would lock an account the instant it's in the SS death register, but it happened zero times across all associated accounts and services in administering a recent estate of a deceased last remaining spouse.
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Post by Luckywon »

oyster99 wrote: Mon Aug 02, 2021 8:43 am
NO. They absolutely DO NOT proactively lock accounts once the name appears in the SS death register.
Not according to my experience. I have seen Bank of America do this for two different family members, with no notice.
oyster99
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Post by oyster99 »

Luckywon wrote: Mon Aug 02, 2021 9:34 am
oyster99 wrote: Mon Aug 02, 2021 8:43 am
NO. They absolutely DO NOT proactively lock accounts once the name appears in the SS death register.
Not according to my experience. I have seen Bank of America do this for two different family members, with no notice.
Interesting, and thanks for the additional data point on BofA. Was there anything special or out-of-the-ordinary about these accounts or how they were titled, or were these just general individual checking accounts? Was this fairly recently?
When you say "with no notice" I presume you mean with no notice of the death given to BofA by anyone except the SS death file, but did the account holder at least receive notice of account locking at their address of record, from BoA?
Charon
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Post by Charon »

It's more than just a will. He also needs a durable power of attorney, health care power of attorney, and health care directive. (Depending on the state, details may vary.)

All of which a lawyer can easily prepare at the same time as a will, often for one package fee that is minuscule in proportion to his assets. These things are very important. He presumably wouldn't want a big fight within his family over end-of-life care, would he?
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Sandtrap »

Seek legal counsel.

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rcarnes1
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by rcarnes1 »

And how will the taxes and outstanding bills be paid if all assets pass by beneficiary and POD? Not a good idea.
Charon
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Charon »

Freetime76 wrote: Mon Aug 02, 2021 6:40 am Look, most people *don’t* have a will
This is technically true, if you're looking at the entire population (including children), but it's absolutely not true of older Americans. 76% of those over the age of 65 have a will ( https://news.gallup.com/poll/351500/how ... -will.aspx ).

Also, the median net worth of an American is about $120k ( https://www.forbes.com/advisor/investin ... net-worth/ ). For people like this guy - over age 70, with over $2M in assets - not having a will is extremely unusual.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by RoadagentMN »

what can you do about ? His money -his rules
Luckywon
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Luckywon »

oyster99 wrote: Mon Aug 02, 2021 9:53 am
Luckywon wrote: Mon Aug 02, 2021 9:34 am
oyster99 wrote: Mon Aug 02, 2021 8:43 am
NO. They absolutely DO NOT proactively lock accounts once the name appears in the SS death register.
Not according to my experience. I have seen Bank of America do this for two different family members, with no notice.
Interesting, and thanks for the additional data point on BofA. Was there anything special or out-of-the-ordinary about these accounts or how they were titled, or were these just general individual checking accounts? Was this fairly recently?
When you say "with no notice" I presume you mean with no notice of the death given to BofA by anyone except the SS death file, but did the account holder at least receive notice of account locking at their address of record, from BoA?
One of the accounts was a trust account. The original account was frozen, until a new account registered to the now irrevocable trust, which had its own new EIN, was opened and the assets transferred to it. That took about three weeks, if I remember right.

Another account was an individually titled account. Not long after the owner's death, all access to the account was terminated. It was months before access was established.

To my knowledge, no one from the family notified B of A of either death and no prior written notice was received at the address of record.

In both cases the estate department at B of A was very difficult to communicate with and made the process extraordinarily difficult to navigate. Your friendly banker they are not.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Carefreeap »

Charon wrote: Mon Aug 02, 2021 9:59 am It's more than just a will. He also needs a durable power of attorney, health care power of attorney, and health care directive. (Depending on the state, details may vary.)

All of which a lawyer can easily prepare at the same time as a will, often for one package fee that is minuscule in proportion to his assets. These things are very important. He presumably wouldn't want a big fight within his family over end-of-life care, would he?
End of life care might move the needle with a cheap, stubbron 78 year old DIYer.
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aristotelian
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Post by aristotelian »

Still probably a good idea to name an Executor to settle debts and cash checks for funds owed at the very least.
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Post by rh00p »

Intends to have no will? I wonder whose idea it was. 🤔
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by muddlehead »

@teuton33

Haven't read all the replies.

Payable on death accounts are fine.

Are you 100% certain you and your sister are named 50/50 beneficiaries on the accounts you say you are getting at his death?

I have POD for my 2 sons 50/50 like you and your sister.

All my sons need to do at my death is got to the institution w/a death certificate and, I think, an affidavit of domicile and their drivers license/ID -

And the money is theirs.
Last edited by muddlehead on Mon Aug 02, 2021 11:45 am, edited 1 time in total.
tibbitts
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Post by tibbitts »

lakpr wrote: Mon Aug 02, 2021 5:38 am
Phaethon wrote: Mon Aug 02, 2021 4:06 am What's wrong with that? I'm actually in the process of having a new estate plan drawn up in my current state as opposed to the state where the current plan was drawn up. I'm securely providing my 1Password Emergency Kit to my new estate attorney to give to my sister, who is the executor of my will and primary beneficiary of my Trust, if I get hit by a truck or something so that she can access all of my accounts (2FA issue notwithstanding; need to look into a Yubikey).
Issue is that, once the bank/ credit union/ brokerage firm knows you are dead (they scan the social security list of dead people, your funeral home or hospital where you died is obligated to inform SS), they lock the accounts. To be opened only to estate executors. Your username / password / Yubikey would all be useless then.
My only experience with this was that for a couple of years after death there was no reaction from two banks, and even then I had to initiate changes to the accounts. Has anyone had different experiences?
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Post by Flobes »

oyster99 wrote: Mon Aug 02, 2021 9:53 am
Luckywon wrote: Mon Aug 02, 2021 9:34 am
oyster99 wrote: Mon Aug 02, 2021 8:43 am
NO. They absolutely DO NOT proactively lock accounts once the name appears in the SS death register.
Not according to my experience. I have seen Bank of America do this for two different family members, with no notice.
Was there anything special or out-of-the-ordinary about these accounts or how they were titled, or were these just general individual checking accounts?

When you say "with no notice" I presume you mean with no notice of the death given to BofA by anyone except the SS death file, but did the account holder at least receive notice of account locking at their address of record, from BoA?
When my father died, a kind CSR at the bank (unofficially) called my mother to alert her that their safety deposit box, on which they were both signators, would be sealed, per the law, at the end of the day. On the way home from the funeral, I went with my mother to empty the vault.

When my mother died, her checking account was immediately frozen. All her outstanding checks, and there were many, bounced. And her incoming deposits -- SS and her pension -- bounced out. No notification was ever sent by the bank. Learned of this when a check my mother sent as a baby gift bounced, and the new dad, unaware of her death, sheepishly left a voice mail. The "Past Due" notices quickly followed.

muddlehead wrote: Mon Aug 02, 2021 11:30 am @teuton33

Payable on death accounts are fine.
I have POD for my 2 sons 50/50.

All my sons need to do at my death is got to the institution w/a death certificate and, I think, an affidavit of domicile and their drivers license/ID -

And the money is theirs.
Maybe.

My mother, a child of the Great Depression, had her money scattered in a dozen banks.

My sibling and I were 50/50 PODs, as well as co-executors.

Amazingly, there were many different protocols. Many required us to appear in person at the same time. One bank required a meeting with the manager who had no free appointment times for 10 days. We spent a lot of time waiting in uncomfortable chairs in bank lobbies. Some put a several days "hold" on the distributions, and we both had to appear in person again to fetch the money. One bank would only allow it to be deposited into a new account there, and we had to pay the one month fee before we could close the new account and get it out of there. One required two photo IDs. One bank handled it on the phone bcz my sibling was a significant account holder, they could confirm the death online, and two checks were in the mail that day. And some were smooth sailing: appear with a death certificate and a drivers license, walk out with a check.
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FIREchief
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by FIREchief »

rcarnes1 wrote: Mon Aug 02, 2021 10:05 am And how will the taxes and outstanding bills be paid if all assets pass by beneficiary and POD? Not a good idea.
Perhaps the more meaningful question is "what happens if taxes and outstanding bills are not paid?" In many cases (perhaps not the OP's situation) the answer is "nothing."
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
RoadagentMN
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by RoadagentMN »

rh00p wrote: Mon Aug 02, 2021 11:25 am Intends to have no will? I wonder whose idea it was. 🤔
His money, his rules.
senex
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by senex »

In 60-90% of deaths, the will (if it exists at all) never sees the inside of a courtroom [1]. In those cases, everything passes via joint tenancy, beneficiary/tod, or small estate procedures, and the little details somehow manage to get done.

A will or trust does not prevent conflict, fraud, or lawsuits among heirs. Though a well-constructed plan may reduce the chance.

In a strictly logical sense, a will is strictly better than no will, and an estate plan is strictly better than no plan. But given psychology, paradox of choice, finite time/energy, and other human constraints, sometimes a no-will situation may be fine. It depends on your unique circumstances.

[1] From the only rigorous source I've found. See full details in this thread: viewtopic.php?f=2&t=297276
okie745
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by okie745 »

The question I thought of is, what if spousal rights of intestate succession conflict with the pay on death accounts.

You can't do a pay on death for property that you don't own. Since he has been married for this many years, does the wife now have a spousal interest in those accounts. Think of if they were to divorce today, would she get half of the increased value in those accounts?

For a single person, his plan MIGHT be ok. But if you add in a spouse or say minor children, then state law kicks in and MAY guarantee certain assets to the spouse, etc. This type of question is very state specific.

He really needs a lawyer to look over his plan and see if it is ok in his state.

From investopedia: An unmarried person may choose anyone as a beneficiary, but a married person's spouse may have rights to some or all of a retirement account upon death.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by hudson »

teuton33 wrote: Sun Aug 01, 2021 3:14 pm My father is 78 years old. He remarried to someone much younger (55). They have been together for 10 years. He’s leaving the house valued at ~1m in a HCOL to the new spouse as well as 300-400k of retirement accounts. The rest of his accounts (300k in Roth and 1.2m in taxable) he intends to leave to my sister and I split 50/50.

He intends to have this coordinated purely through designated beneficiaries on the various accounts. He has no plans for a will or anything else like that.

Is this a sound strategy?
Your father does have a plan. On the surface it looks pretty good. It looks like he has included his 3 family members. His intentions are on target.

Bottom Line: Your father's intentions are good. As you know, his intentions may not work out.

Has he asked for your advice? Would he listen to your advice?
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Lee_WSP »

This is getting way off topic, but these are some of the articles that changed my previously cavalier attitude towards my dead body.

https://www.reuters.com/investigates/sp ... s-brokers/

https://www.nbcchicago.com/news/local/b ... d/1988583/

https://www.washingtonpost.com/news/mor ... or-profit/

https://time.com/5636486/fbi-body-donation-arizona/

I won't care, but my offspring might.

Horrendous things include but are not limited to: keeping genitalia as some sort of a trophy, sewing two bodies together in a frankenstein manner, etc etc. I was most certainly not referring to actual science or research institutes.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by JoeRetire »

Lee_WSP wrote: Mon Aug 02, 2021 2:43 pm This is getting way off topic, but these are some of the articles that changed my previously cavalier attitude towards my dead body.

https://www.reuters.com/investigates/sp ... s-brokers/

https://www.nbcchicago.com/news/local/b ... d/1988583/

https://www.washingtonpost.com/news/mor ... or-profit/

https://time.com/5636486/fbi-body-donation-arizona/

I won't care, but my offspring might.

Horrendous things include but are not limited to: keeping genitalia as some sort of a trophy, sewing two bodies together in a frankenstein manner, etc etc. I was most certainly not referring to actual science or research institutes.
Ask your offspring if they care. If they do, either don't donate your body, donate only to institutes that meet your offspring's requirements, or make sure the only thing your offspring know about is your ashes.

If anyone wishes to keep my genitalia when I'm gone, I say good luck with that - I won't need them.
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donall
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by donall »

Grandfather had a one page will. He gave copies of the will along with copies of beneficiary forms to each beneficiary. House, car, and checking account were joint.
There was never any legal need for the will, but was it was useful to identify the executor.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by jeffyscott »

rehoman wrote: Mon Aug 02, 2021 12:17 am
bsteiner wrote: Sun Aug 01, 2021 4:54 pm
Gill wrote: Sun Aug 01, 2021 4:07 pm Who will pay the debts, funeral and administration expenses of the estate? He might die with an asset such as a judgment for his wrongful death which will be disposed of by the intestate laws of his state. His spouse might have a right of election against all the assets of the estate. For someone with those assets to intentionally elect to have no will is just plain foolish.
Agreed. Also what if one of the beneficiaries predeceases him? Also what if there’s a reasonable chance one of his children might get divorced, outlive his/her spouse and remarry, have a taxable estate, have creditors, or want Medicaid? Leaving the children’s shares in trust rather than outright will better protect their inheritances.

It may be worth spending a few thousand dollars to protect against these possibilities.
Absolutely he should spend the money and have a will. A TOD designation can be a beautiful thing, but things can go wrong. What happens if you predecease him, as bsteiner points out? Problem might be solved if it is TOD "per stirpes". But last time I checked Vanguard does not allow a "per stirpes" designation (Fidelity still does, I believe.) A will is a must!
How does a will help, if one of the beneficiaries predeceases him? If it is not per stirpes, then all the money just goes the to other named primary beneficiary.
Naikansha
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Naikansha »

A will with a tangible personal property list that shows descriptions of items and recipients will be useful for distributing such property to beneficiaries including people and charitable organizations.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by quantAndHold »

tibbitts wrote: Mon Aug 02, 2021 11:35 am
lakpr wrote: Mon Aug 02, 2021 5:38 am
Phaethon wrote: Mon Aug 02, 2021 4:06 am What's wrong with that? I'm actually in the process of having a new estate plan drawn up in my current state as opposed to the state where the current plan was drawn up. I'm securely providing my 1Password Emergency Kit to my new estate attorney to give to my sister, who is the executor of my will and primary beneficiary of my Trust, if I get hit by a truck or something so that she can access all of my accounts (2FA issue notwithstanding; need to look into a Yubikey).
Issue is that, once the bank/ credit union/ brokerage firm knows you are dead (they scan the social security list of dead people, your funeral home or hospital where you died is obligated to inform SS), they lock the accounts. To be opened only to estate executors. Your username / password / Yubikey would all be useless then.
My only experience with this was that for a couple of years after death there was no reaction from two banks, and even then I had to initiate changes to the accounts. Has anyone had different experiences?
Yes, after mom’s death, Dad’s check to the funeral home bounced because the mutual fund company froze their joint money market account. He hadn’t notified them that she died yet.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by bsteiner »

jeffyscott wrote: Mon Aug 02, 2021 3:46 pm
rehoman wrote: Mon Aug 02, 2021 12:17 am
bsteiner wrote: Sun Aug 01, 2021 4:54 pm
Gill wrote: Sun Aug 01, 2021 4:07 pm Who will pay the debts, funeral and administration expenses of the estate? He might die with an asset such as a judgment for his wrongful death which will be disposed of by the intestate laws of his state. His spouse might have a right of election against all the assets of the estate. For someone with those assets to intentionally elect to have no will is just plain foolish.
Agreed. Also what if one of the beneficiaries predeceases him? Also what if there’s a reasonable chance one of his children might get divorced, outlive his/her spouse and remarry, have a taxable estate, have creditors, or want Medicaid? Leaving the children’s shares in trust rather than outright will better protect their inheritances.

It may be worth spending a few thousand dollars to protect against these possibilities.
Absolutely he should spend the money and have a will. A TOD designation can be a beautiful thing, but things can go wrong. What happens if you predecease him, as bsteiner points out? Problem might be solved if it is TOD "per stirpes". But last time I checked Vanguard does not allow a "per stirpes" designation (Fidelity still does, I believe.) A will is a must!
How does a will help, if one of the beneficiaries predeceases him? If it is not per stirpes, then all the money just goes the to other named primary beneficiary.
When doing a Will we discuss this. Most people want the share of a predeceased child to go in trust for the child’s issue, either per stirpes or by representation. Some people might want some or all of the share of a predeceased child to first go in trust for the child’s spouse. However, many people want bequests to others only go to those who survive.

You can do the same with beneficiary designations (though it’s difficult if you need to do it by formula), and we do for life insurance and retirement benefits. But it’s often more difficult, and it’s unlikely to happen if, for example, a broker has the client fill out a beneficiary designation for.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by HanSolo »

aristotelian wrote: Mon Aug 02, 2021 10:59 am Still probably a good idea to name an Executor to settle debts and cash checks for funds owed at the very least.
Naming an Executor might also be useful even if all assets are controlled by beneficiary designations, or so I'm led to believe.

After my mom died with very little in assets, I called her bank branch manager and notified her of my mom's death (she already knew, due to someone else contacting the bank; I had also spoken with her before, on my mom's behalf, while my mom was alive, so she knew who I was). I asked if my mom's account had a TOD/POD. She said she can't release any information about the account except to the officially-appointed Executor.

I don't know if it's a peculiarity of that bank or that manager, but it does seem that without an Executor, even a TOD/POD might not work. And I don't know how an Executor gets appointed in the absence of a Will.
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Mr. Rumples
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Mr. Rumples »

HanSolo wrote: Tue Aug 03, 2021 5:50 am
aristotelian wrote: Mon Aug 02, 2021 10:59 am Still probably a good idea to name an Executor to settle debts and cash checks for funds owed at the very least.
Naming an Executor might also be useful even if all assets are controlled by beneficiary designations, or so I'm led to believe.

After my mom died with very little in assets, I called her bank branch manager and notified her of my mom's death (she already knew, due to someone else contacting the bank; I had also spoken with her before, on my mom's behalf, while my mom was alive, so she knew who I was). I asked if my mom's account had a TOD/POD. She said she can't release any information about the account except to the officially-appointed Executor.

I don't know if it's a peculiarity of that bank or that manager, but it does seem that without an Executor, even a TOD/POD might not work. And I don't know how an Executor gets appointed in the absence of a Will.
Depends on the state. In VA, just because someone names an executor (officially called personal representative) that doesn't make them so. That person must take the original will, not a copy, and a death certificate to the Clerk’s Office of the Circuit Court that has jurisdiction over the will. Jurisdiction is determined, there are some legal requirements, and the Clerk or Deputy Clerk will review the will and the conditions under which it was signed (not under duress for example) and only then will the will be admitted to probate. In VA, the Court, through the Commissioner of Accounts which is in the court system may appoint someone who volunteers. In VA, if no one steps up, then the Commissioner of Accounts steps in and can take up to 5% of assets. My uncle was a Commissioner of Accounts. When I visited once and asked where he got such a beautiful antique breakfront, I was told he took that as his fee for settling an estate...not a bad gig. Every state has a different process.

One thing that has been a sticking point is who has the authority to determine disposition of the body. In VA, that goes to the next of kin unless it's specified otherwise. Problem is that in VA, a lot of people fall into the category of next of kin and when there is disagreement between them, the court decides.

As in VA, most states have the process outlined:

https://www.vba.org/page/guide_estates#funeral
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by jeffyscott »

bsteiner wrote: Mon Aug 02, 2021 7:15 pm
jeffyscott wrote: Mon Aug 02, 2021 3:46 pm
rehoman wrote: Mon Aug 02, 2021 12:17 am
bsteiner wrote: Sun Aug 01, 2021 4:54 pm
Gill wrote: Sun Aug 01, 2021 4:07 pm Who will pay the debts, funeral and administration expenses of the estate? He might die with an asset such as a judgment for his wrongful death which will be disposed of by the intestate laws of his state. His spouse might have a right of election against all the assets of the estate. For someone with those assets to intentionally elect to have no will is just plain foolish.
Agreed. Also what if one of the beneficiaries predeceases him? Also what if there’s a reasonable chance one of his children might get divorced, outlive his/her spouse and remarry, have a taxable estate, have creditors, or want Medicaid? Leaving the children’s shares in trust rather than outright will better protect their inheritances.

It may be worth spending a few thousand dollars to protect against these possibilities.
Absolutely he should spend the money and have a will. A TOD designation can be a beautiful thing, but things can go wrong. What happens if you predecease him, as bsteiner points out? Problem might be solved if it is TOD "per stirpes". But last time I checked Vanguard does not allow a "per stirpes" designation (Fidelity still does, I believe.) A will is a must!
How does a will help, if one of the beneficiaries predeceases him? If it is not per stirpes, then all the money just goes the to other named primary beneficiary.
When doing a Will we discuss this. Most people want the share of a predeceased child to go in trust for the child’s issue, either per stirpes or by representation. Some people might want some or all of the share of a predeceased child to first go in trust for the child’s spouse. However, many people want bequests to others only go to those who survive.

You can do the same with beneficiary designations (though it’s difficult if you need to do it by formula), and we do for life insurance and retirement benefits. But it’s often more difficult, and it’s unlikely to happen if, for example, a broker has the client fill out a beneficiary designation for.
I meant if beneficiaries are named on the accounts, then the will never comes into play (as I understand it). For example if my IRA says it goes to A, B, and C in equal shares and C dies, then the money is split between A and B (assuming the account does not specify per stirpes). If the will says that C's share goes to their spouse and kids, that does not change what happens with the IRA assets.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by michaeljc70 »

As others have said, the main issues are personal belongings and if one of the expected beneficiaries dies before the father. For example, say the wife dies before the father and he doesn't change who gets the house in time. The wife's long lost cousin (or whoever her heirs could be) could get the house. Some brokerages allow more advanced beneficiary designations but some don't.

In some states, even having a will (rather than a trust) could cause a lot of fees/expenses/costs.
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Re: Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this w

Post by Luckywon »

HanSolo wrote: Tue Aug 03, 2021 5:50 am
I asked if my mom's account had a TOD/POD. She said she can't release any information about the account except to the officially-appointed Executor.
Did it end up that you were actually a TOD/POD beneficiary? I'm wondering whether the complete answer was that she could not release any information about the account except to the executive or a TOD/POD beneficiary.
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