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

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teuton33
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Father intends to have no will. He will use named beneficiaries on accounts to distribute assets to heirs. Is this wise?

Post by teuton33 »

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?
Nyc10036
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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 Nyc10036 »

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.
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nedsaid
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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 nedsaid »

No. He still needs at least a simple will for the distribution of his personal belongings and for any assets without a named beneficiary. A will can help with unexpected events that come up or in case your Dad forgets to name a beneficiary on an account.
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teuton33
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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 teuton33 »

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.
I have no idea. I think they are all brokerage accounts. I think any brokerage account lets you specify a beneficiary, right? They are all with fidelity AFAIK
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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 nedsaid »

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.
Taxable mutual fund accounts are Transfer on 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 Lee_WSP »

A will from any lawyer is going to cost a tiny fraction of the estate. It does not make any sense to DIY this.
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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 JoMoney »

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
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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 Nyc10036 »

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
Thanks!
I did not know that.
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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 »

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?
How did he arrive at this plan? Perhaps it's a good one-it's simplicity is certainly appealing. But a consultation with an estate attorney night be worthwhile. He may be unaware of other options that may effect a plan that he likes more.
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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 gwe67 »

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?
Unless he's done something with the deed, the house (along with the rest of the residuary estate) will be passed on per his state's intestate rules. Someone will be named as executor.

He may be limited by spousal share as to what he can give away.

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.

As is, I foresee potential for conflict. I guess that's why you are asking whether this is wise.

He needs to have a lawyer draft a will.
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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 marcopolo »

gwe67 wrote: Sun Aug 01, 2021 3:25 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?
Unless he's done something with the deed, the house (along with the rest of the residuary estate) will be passed on per his state's intestate rules. Someone will be named as executor.

He may be limited by spousal share as to what he can give away.

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.

As is, I foresee potential for conflict. I guess that's why you are asking whether this is wise.

He needs to have a lawyer draft a will.
Would a will help in that case?
I thought beneficiary designations take precedence over the language in a will.
The will identifies what happens to assets in the estate. The beneficiary designation transfers assets to the beneficiary outside of the estate.
At least that is my understanding, I am certainly no expert in this area.
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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 Watty »

teuton33 wrote: Sun Aug 01, 2021 3:14 pm Is this a sound strategy?
I am not a lawyer but it sounds like things would get real tricky if anything happens like he outlives you, the spouse, or your your sister.

The problem is something happens like you die then you portion of his accounts might go your estate(likely your spouse), your kids, or to your sister. I don't know how that would be determined but the money might not go where he would want it to.
teuton33 wrote: Sun Aug 01, 2021 3:14 pm He has no plans for a will or anything else like that.
When I did my will at Legal Zoom it only cost a few hundred dollar and in addition to the will it was a bundle of other important paperwork like medical directives and a power of attorney document. These are in many ways as important as the will itself.

Even if he is able to name beneficiaries like he wants having a simple will makes it a lot easier to handle any other things like cars, storage units, safe deposit boxes, etc that might not have a beneficiary.
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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 »

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.
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teuton33
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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 teuton33 »

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?
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CenTexan
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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 CenTexan »

Ask you dad to at least put in writing what he wants to happen with assets. As mentioned, sometimes companies lose beneficiary information (it happened to me). I now keep PDF and paper printouts of beneficiary designations for all our assets.

A formal will would allow for LEGAL action, but he apparently hopes it will not come to that. My friend, following his dad's informal written instructions, amicably split his dad's estate with his sibling without the use of the will and without having to go to probate - so it is possible.
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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 nisiprius »

The only way to find out if it is a sound strategy is to pay an estate lawyer to review the situation and give an opinion on whether it is a sound strategy.
Last edited by nisiprius on Sun Aug 01, 2021 3:52 pm, edited 3 times in total.
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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 »

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.
Potential lawsuits.

For someone with a sizeable portfolio, your father is choosing a terrible way to save a few dollars.
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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 gwe67 »

marcopolo wrote: Sun Aug 01, 2021 3:35 pm
gwe67 wrote: Sun Aug 01, 2021 3:25 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?
Unless he's done something with the deed, the house (along with the rest of the residuary estate) will be passed on per his state's intestate rules. Someone will be named as executor.

He may be limited by spousal share as to what he can give away.

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.

As is, I foresee potential for conflict. I guess that's why you are asking whether this is wise.

He needs to have a lawyer draft a will.
Would a will help in that case?
I thought beneficiary designations take precedence over the language in a will.
The will identifies what happens to assets in the estate. The beneficiary designation transfers assets to the beneficiary outside of the estate.
At least that is my understanding, I am certainly no expert in this area.
I don't think that a will helps at all in this case. I no longer use Fidelity but it looks like anyone with login credentials can change beneficiaries. This is a poor practice by Fidelity and naming beneficiaries should only be allowed with a notarized document.
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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 Chuckles960 »

JoMoney wrote: Sun Aug 01, 2021 3:23 pmIt 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
How is a ToD form different from entering beneficiaries via the web? I have just done the latter, but I now see that Fidelity also offers a downloadable PDF ToD form, and that this form describes itself as a way to name beneficiaries...

Many thanks,
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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 delamer »

Watty wrote: Sun Aug 01, 2021 3:37 pm
teuton33 wrote: Sun Aug 01, 2021 3:14 pm Is this a sound strategy?
I am not a lawyer but it sounds like things would get real tricky if anything happens like he outlives you, the spouse, or your your sister.

The problem is something happens like you die then you portion of his accounts might go your estate(likely your spouse), your kids, or to your sister. I don't know how that would be determined but the money might not go where he would want it to.
teuton33 wrote: Sun Aug 01, 2021 3:14 pm He has no plans for a will or anything else like that.
When I did my will at Legal Zoom it only cost a few hundred dollar and in addition to the will it was a bundle of other important paperwork like medical directives and a power of attorney document. These are in many ways as important as the will itself.

Even if he is able to name beneficiaries like he wants having a simple will makes it a lot easier to handle any other things like cars, storage units, safe deposit boxes, etc that might not have a beneficiary.
I once dated a guy whose parents married when his mother was 20 and his father was 40. Guess which spouse died first?

As Watty says, things can get really tricky if life doesn’t play out like your father expects.

This is classic “pennywise, pound foolish.”

Do you think your father’s wife could be persuaded to convince your father than they both need wills and estate planning documents prepared by a lawyer?
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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 »

gwe67 wrote: Sun Aug 01, 2021 3:54 pm
marcopolo wrote: Sun Aug 01, 2021 3:35 pm
gwe67 wrote: Sun Aug 01, 2021 3:25 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?
Unless he's done something with the deed, the house (along with the rest of the residuary estate) will be passed on per his state's intestate rules. Someone will be named as executor.

He may be limited by spousal share as to what he can give away.

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.

As is, I foresee potential for conflict. I guess that's why you are asking whether this is wise.

He needs to have a lawyer draft a will.
Would a will help in that case?
I thought beneficiary designations take precedence over the language in a will.
The will identifies what happens to assets in the estate. The beneficiary designation transfers assets to the beneficiary outside of the estate.
At least that is my understanding, I am certainly no expert in this area.
I don't think that a will helps at all in this case. I no longer use Fidelity but it looks like anyone with login credentials can change beneficiaries. This is a poor practice by Fidelity and naming beneficiaries should only be allowed with a notarized document.
What are you two debating? Only a joint account owner may change beneficiary designations and only unilaterally once the other owner is dead. Either way, if it's a joint account it goes to the survivor first who can then do whatever they want with it.

The solution to the problem of the survivor altering the plan is a testamentary trust or a living trust.
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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 Gill »

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.
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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 JoMoney »

Chuckles960 wrote: Sun Aug 01, 2021 4:01 pm
JoMoney wrote: Sun Aug 01, 2021 3:23 pmIt 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
How is a ToD form different from entering beneficiaries via the web? I have just done the latter, but I now see that Fidelity also offers a downloadable PDF ToD form, and that this form describes itself as a way to name beneficiaries...

Many thanks,
I don't know what you're looking at specifically, but my assumption would be naming a beneficiary via online form is the same as filling out a paper ToD form. Same thing, different way to provide the info. I've done it online.
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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 Chuckles960 »

JoMoney wrote: Sun Aug 01, 2021 4:08 pm I don't know what you're looking at specifically...
Fidelity PDF form: https://institutional.fidelity.com/app/ ... 740568.PDF

web interface: accessible after logging in so i can't give a link.

I could not find any text on Fidelity's web page that says the two are equivalent. Logic seems to suggest that they are, but laws and regulations are not always logical.
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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 gwe67 »

Chuckles960 wrote: Sun Aug 01, 2021 4:14 pm
JoMoney wrote: Sun Aug 01, 2021 4:08 pm I don't know what you're looking at specifically...
Fidelity PDF form: https://institutional.fidelity.com/app/ ... 740568.PDF

web interface: accessible after logging in so i can't give a link.

I could not find any text on Fidelity's web page that says the two are equivalent. Logic seems to suggest that they are, but laws and regulations are not always logical.
This is even less secure than requiring login credentials. With your name, SSN, and account number I can make myself beneficiary of your account using this form.
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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 JoMoney »

Chuckles960 wrote: Sun Aug 01, 2021 4:14 pm
JoMoney wrote: Sun Aug 01, 2021 4:08 pm I don't know what you're looking at specifically...
Fidelity PDF form: https://institutional.fidelity.com/app/ ... 740568.PDF

web interface: accessible after logging in so i can't give a link.

I could not find any text on Fidelity's web page that says the two are equivalent. Logic seems to suggest that they are, but laws and regulations are not always logical.
If you're concerned about confirming that where you're naming the beneficiary online is the same as the TOD paper form, you should talk to Fidelity.
I'm pretty confident it's the same thing, but I'm just some guy on the Internet.
They have more info about naming beneficiary online in the video here, they don't call it TOD in the video (just "naming beneficiary") but I'm pretty confident it's the same thing.:
https://www.fidelity.com/customer-servi ... eficiaries
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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 Prudence »

Sorry for this digression. I understand that a person named on a TOD or POD receives the proceeds immediately upon the death of the decedent, and this bypasses a will, if there is one, and trumps any conflict with the will. But, is this also true of a named "beneficiary" (not a TOD or POD)?
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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 RickBoglehead »

Prudence wrote: Sun Aug 01, 2021 4:37 pm Sorry for this digression. I understand that a person named on a TOD or POD receives the proceeds immediately upon the death of the decedent, and this bypasses a will, if there is one, and trumps any conflict with the will. But, is this also true of a named "beneficiary" (not a TOD or POD)?
Nothing happens immediately. The financial institution must receive a copy of the death certificate. If a beneficiary contacts them, they will release the funds to that person per the terms. Same as a POD/TOD in practice.
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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 RickBoglehead »

gwe67 wrote: Sun Aug 01, 2021 4:21 pm
Chuckles960 wrote: Sun Aug 01, 2021 4:14 pm
JoMoney wrote: Sun Aug 01, 2021 4:08 pm I don't know what you're looking at specifically...
Fidelity PDF form: https://institutional.fidelity.com/app/ ... 740568.PDF

web interface: accessible after logging in so i can't give a link.

I could not find any text on Fidelity's web page that says the two are equivalent. Logic seems to suggest that they are, but laws and regulations are not always logical.
This is even less secure than requiring login credentials. With your name, SSN, and account number I can make myself beneficiary of your account using this form.
That would be forgery. And the institution will send confirmation of the change via US Mail.

Are you saying it's easier to commit a crime online or by mail, I'm confused.
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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 JoMoney »

RickBoglehead wrote: Sun Aug 01, 2021 4:45 pm...
That would be forgery. And the institution will send confirmation of the change via US Mail...
Yes, or at least most will. I know that with Fidelity, despite having everything I can set to paperless/online notifications, I still get sent a paper notification in snail-mail (as well as email) that my account was updated per my request, and to contact them immediately if I did not request or had any questions.
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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 RickBoglehead »

Lee_WSP wrote: Sun Aug 01, 2021 4:05 pm Only a joint account owner may change beneficiary designations and only unilaterally once the other owner is dead. Either way, if it's a joint account it goes to the survivor first who can then do whatever they want with it.

The solution to the problem of the survivor altering the plan is a testamentary trust or a living trust.
I see zero mention of any joint 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 Lee_WSP »

RickBoglehead wrote: Sun Aug 01, 2021 4:48 pm
Lee_WSP wrote: Sun Aug 01, 2021 4:05 pm Only a joint account owner may change beneficiary designations and only unilaterally once the other owner is dead. Either way, if it's a joint account it goes to the survivor first who can then do whatever they want with it.

The solution to the problem of the survivor altering the plan is a testamentary trust or a living trust.
I see zero mention of any joint accounts.
And hence my confusion as to what they're debating
Last edited by Lee_WSP on Sun Aug 01, 2021 4:58 pm, edited 1 time in total.
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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 RickBoglehead »

Lee_WSP wrote: Sun Aug 01, 2021 4:51 pm
RickBoglehead wrote: Sun Aug 01, 2021 4:48 pm
Lee_WSP wrote: Sun Aug 01, 2021 4:05 pm Only a joint account owner may change beneficiary designations and only unilaterally once the other owner is dead. Either way, if it's a joint account it goes to the survivor first who can then do whatever they want with it.

The solution to the problem of the survivor altering the plan is a testamentary trust or a living trust.
I see zero mention of any joint accounts.
And hence be confusion as to what they're debating
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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 »

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.
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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 MulesFan »

I have a friend whose parents didn’t have a will coz they didn’t want the government involved (their words, not mine). All their children knew of the arrangements they had made for their estate. One parent died. The surviving parent had to go into a nursing home a few months later. Some siblings took surviving parent to bank, removed friend from bank account that she was to receive, accused her of stealing from parents, wouldn’t allow her to visit parent without one of them being there, etc. The once happy family has been shattered and there are lawsuits from both sides. Both parents are gone now so they can't see what they inadvertently set into motion, but I’m pretty sure they didn’t expect this to happen.
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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 Rex66 »

This is the problem waiting until 78

Likely stuck in his ways and in the end he can do whatever he wants. Explaining the situation turns you into the bad guy.

Still I’d ask for a simple peace of paper stating what goes to whom and that everything else not mentioned including paying for final bills goes to her. If he is willing to go further but cheap then legal zoom. I doubt such an individual would be willing to pay for lawyer. You could offer to pay for it and let him and his wife pick the lawyer. If you pick the lawyer, expect no or them “needing their own lawyer”.
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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 Big Dog »

How does he hold title to the house? Is he in a community property state?

What about contingent beneficiaries? Does your dad care what happens to his estate if his current spouse dies shortly after him?

What if dad becomes incapacitated (stroke, alzheimers, etc), and wife dies first? Who has authority to step in?
Last edited by Big Dog on Sun Aug 01, 2021 6:10 pm, edited 2 times in total.
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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 gwe67 »

RickBoglehead wrote: Sun Aug 01, 2021 4:45 pm
gwe67 wrote: Sun Aug 01, 2021 4:21 pm
Chuckles960 wrote: Sun Aug 01, 2021 4:14 pm
JoMoney wrote: Sun Aug 01, 2021 4:08 pm I don't know what you're looking at specifically...
Fidelity PDF form: https://institutional.fidelity.com/app/ ... 740568.PDF

web interface: accessible after logging in so i can't give a link.

I could not find any text on Fidelity's web page that says the two are equivalent. Logic seems to suggest that they are, but laws and regulations are not always logical.
This is even less secure than requiring login credentials. With your name, SSN, and account number I can make myself beneficiary of your account using this form.
That would be forgery. And the institution will send confirmation of the change via US Mail.

Are you saying it's easier to commit a crime online or by mail, I'm confused.
It can happen if the account owner is senile, incapacitated, or not the person who collects the mail. Going "paperless" may result in no mailed notice.

Real world example. A friend's father changed beneficiary designations on his deathbed. Friend and his sister got nothing, all went to new [(removed) --admin LadyGeek] wife. Crime? Probably. Recourse? Nope. "Burden of proof."

They require medallion signatures for silly things, but do not require a notary for the form that will determine ownership of the account?
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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 marcopolo »

Lee_WSP wrote: Sun Aug 01, 2021 4:05 pm
gwe67 wrote: Sun Aug 01, 2021 3:54 pm
marcopolo wrote: Sun Aug 01, 2021 3:35 pm
gwe67 wrote: Sun Aug 01, 2021 3:25 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?
Unless he's done something with the deed, the house (along with the rest of the residuary estate) will be passed on per his state's intestate rules. Someone will be named as executor.

He may be limited by spousal share as to what he can give away.

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.

As is, I foresee potential for conflict. I guess that's why you are asking whether this is wise.

He needs to have a lawyer draft a will.
Would a will help in that case?
I thought beneficiary designations take precedence over the language in a will.
The will identifies what happens to assets in the estate. The beneficiary designation transfers assets to the beneficiary outside of the estate.
At least that is my understanding, I am certainly no expert in this area.
I don't think that a will helps at all in this case. I no longer use Fidelity but it looks like anyone with login credentials can change beneficiaries. This is a poor practice by Fidelity and naming beneficiaries should only be allowed with a notarized document.
What are you two debating? Only a joint account owner may change beneficiary designations and only unilaterally once the other owner is dead. Either way, if it's a joint account it goes to the survivor first who can then do whatever they want with it.

The solution to the problem of the survivor altering the plan is a testamentary trust or a living trust.

I interpreted gwe67 as suggesting the wife could log into the husband's account and change beneficiaries if they just happen to know their login credentials. While you are right, legally, only a joint account holder can change a beneficiary, how would a surviving child prove that it was not the father making the change?
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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 celia »

Why isn’t the wife on the house deed now? It will simplify her life later on if he is sure she should get the house. And, if she dies first, the house will get a step up in value.
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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 livelovelaugh00 »

I don't see much problem as long as the father designates beneficiary on every accounts including bank accounts. He means roughly half of the assets go to his wife. The other half shared between his kids. His wife can give her share to charity if she wishes.
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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 »

marcopolo wrote: Sun Aug 01, 2021 6:23 pm
Lee_WSP wrote: Sun Aug 01, 2021 4:05 pm
gwe67 wrote: Sun Aug 01, 2021 3:54 pm
marcopolo wrote: Sun Aug 01, 2021 3:35 pm
gwe67 wrote: Sun Aug 01, 2021 3:25 pm

Unless he's done something with the deed, the house (along with the rest of the residuary estate) will be passed on per his state's intestate rules. Someone will be named as executor.

He may be limited by spousal share as to what he can give away.

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.

As is, I foresee potential for conflict. I guess that's why you are asking whether this is wise.

He needs to have a lawyer draft a will.
Would a will help in that case?
I thought beneficiary designations take precedence over the language in a will.
The will identifies what happens to assets in the estate. The beneficiary designation transfers assets to the beneficiary outside of the estate.
At least that is my understanding, I am certainly no expert in this area.
I don't think that a will helps at all in this case. I no longer use Fidelity but it looks like anyone with login credentials can change beneficiaries. This is a poor practice by Fidelity and naming beneficiaries should only be allowed with a notarized document.
What are you two debating? Only a joint account owner may change beneficiary designations and only unilaterally once the other owner is dead. Either way, if it's a joint account it goes to the survivor first who can then do whatever they want with it.

The solution to the problem of the survivor altering the plan is a testamentary trust or a living trust.

I interpreted gwe67 as suggesting the wife could log into the husband's account and change beneficiaries if they just happen to know their login credentials. While you are right, legally, only a joint account holder can change a beneficiary, how would a surviving child prove that it was not the father making the change?
That's a uh, disturbing thought, but entirely possible, yet outside of this forum I think.
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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 Gill »

livelovelaugh00 wrote: Sun Aug 01, 2021 6:40 pm I don't see much problem as long as the father designates beneficiary on every accounts including bank accounts. He means roughly half of the assets go to his wife. The other half shared between his kids. His wife can give her share to charity if she wishes.
You don’t? Have you read the posts preceding yours, one by a prominent trusts and estates lawyer?
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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 »

It's better to have a Will and not need it than to need a Will and not have it. That said, and as others have mentioned, DPOA, MPOA, etc. may be more important than a will and they all come as one happy package.
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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 »

Gill wrote: Sun Aug 01, 2021 4:07 pm Who will pay the debts, funeral and administration expenses of the estate?
Great question and one for the OP to think about. That said, if all assets of any tangible value pass via TOD/POD, the answer might be "who cares?" Some of us will have no debts, no administration (thus no administration expenses) and a $1500 cremation bill. Celebration of life service will be weeks later at our church. Somebody might have to pull out their wallet to fork over $100 for donuts and coffee. Donate the body to research (I need to do that "one of these days") and the transportation and cremation are free with the ashes shipped prepaid to the zip code of my choice. 8-) (I learned that right here on this great forum 8-) )

Granted, many/most will have more complex estates, but there are certainly exceptions. If God took me and DW home this very day, it would take our heirs/trustees about one day to ensure that all non-trust held assets properly passed to trust ownership. As trustees, they could sell the only vehicle. As people with keys, they could let Goodwill into the Apartment to empty all the "stuff" that they don't want to claim for themselves. The only thing I have that "technically" requires a court appointed personal representative is a 5 x 5 storage unit with our Christmas decorations, some moving supplies and a couple of TV boxes. If they aren't able to grab that stuff, I guess you'll all be watching it on that crappy cable show where storage units are auctioned off. If anybody bids more than $100, they'll be very disappointed. :P
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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 Minty »

Huge mistake. Will work well if everyone involved is an angel.
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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 »

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:
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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 baconavocado »

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.
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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 Zeno »

I never understood why anybody wouldn’t take the following prudent steps:

Will

Health directive

Power of attorney

We have had those since we started having children — and actually, we had them shortly after we got married. Then we updated them every 5 years. Then when we moved to a different state, we had them updated by a local highly regarded T&E lawyer. And we will keep doing that until we keel over. Why? We love our children and other beneficiaries. And we don’t like to leave messes for others to have to clean up.

Apparently Susie Orman will do those documents for $69. I don’t recommend that approach, but even that is better than nothing, I bet.

OP may be stuck, as the father is unlikely to relent. It is unfortunate. It is also another reason why nobody should count on an inheritance as the ability of things to get screwed up is infinite and out of a potential beneficiary’s control.
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