Make This Mistake and the Wrong Person Could Inherit What’s Yours…

Will and Testament
With millions descending more deeply into permanent unemployment, a rising sense of entitlement and betrayal, and broke governments that don’t want to admit that their cash flow is collapsing – you need to take note and take action.
Even people with few assets are going to become a bigger and bigger target, as the intensity of financial predators is rising. We urge you to reexamine ALL facets of your personal financial situation and make sure that all your Is are dotted and your Ts crossed.
Let us start with this fact: just one small and common financial document, if filled in wrong, could throw a wrench into even the best-laid estate plans.
Creating a will or setting up a living trust is just the beginning of estate planning. We’ll discuss what this document is, why it’s so common to goof up on it, and what you can do to assure it aligns and supports your estate plan wishes, not ruins them.

Naming Your Beneficiaries:
Do It Wrong and Invite
a Nightmare Scenario

The Wall Street Journal says, “A carelessly named beneficiary on a financial account can be disinherited, a disabled child to lose government benefits, and heirs to be slapped with a big tax bill.”
According to financial and legal professionals, most people don’t pay special attention to the beneficiary designation form tied to their financial accounts. They fill out the form without giving it much thought. However, this simple document, usually only one page or less in length, may have the power to supersede your will and trust.
In other words, “assets with a beneficiary form pass directly to the specified beneficiary, and the will does not control in those situations,” says estate and trust planning attorney Jeremy A. Wechsler. Considering your bank account, IRAs, 401(k), Life Insurance, CDs, stock, bonds, and more, usually require a beneficiary designation form, it’s imperative this is filled out correctly and kept fully up to date so it performs according to your wishes.

Wills, Trusts, and Beneficiary Forms:
Do-it-yourself or
Hire Professional Advisors?

Advisor for Wills, Trusts, and Beneficiary Forms
When it comes to building, preserving, and sharing your wealth with future generations, it makes sense to work with competent advisors. Even if you write your will, or attempt to set up a trust on your own, it is advisable to get a second opinion.
The American Academy of Estate Planning Attorneys (AAEPA) warns: “Even a simple estate plan can run into trouble if all the rules aren’t followed. For example, a Will or Trust is not considered valid unless it has been properly executed according to state law. Some states require two witnesses for a Will. Others require three witnesses, all of whom must be present at the time the Will is signed. And if one of those witnesses is also a beneficiary (like, for example, your spouse), that witness could be disqualified from receiving any assets distributed by your Will or Trust.”
AAEPA says competent advice is needed if:
  • You own property;
  • You own a share in a small business;
  • You wish to disinherit your spouse or child;
  • You wish to leave money to your grandchildren but not your children;
  • You are married and you and/or your spouse have children from a previous marriage;
  • You wish to arrange long-term care for a disabled beneficiary;
  • You have minor children;
  • You have investments, including an IRA or 401(k);
  • You’re worried about young or irresponsible beneficiaries making foolish financial decisions with their inheritance;
  • You have a potentially taxable estate, over $1 million per individual;
  • You would like to include creditor or divorce protection for your beneficiaries;
  • You share property with someone who is not your husband, wife, or legal partner;
  • You fear a challenge to your Will;

Whom Should You Name
and Not Name as a Beneficiary?

You can name individuals, trusts, charities, your estate, organizations, even groups of people such as “all my grandchildren.” However, in many cases it is not a good idea to allow assets to pass directly to minors or someone with disabilities. Also, IRAs and your 401(k) may have a number of tax considerations to beware of, and many advisors pay extra attention to these accounts. For instance…
  • Minor children will need someone to care for them if both parents pass away, and perhaps a separate person to manage the money until the children are old enough to manage it on their own.
  • A loved one with a disability should have money pass to a “special needs” trust; otherwise, he or she risks having government benefits terminated.
  • And it’s important your IRA or 401(k) money goes to the right person(s) at the right time; otherwise, you risk significant and immediate tax liabilities.
In these cases, you’ll need to pay especially close special attention to your beneficiary designation forms, double check them, and get a second opinion from a competent advisor to make sure they align with your estate plans.

Fund Your Estate Plan

Beneficiary of Assets
This is legal language that means, “title your assets to your trust.” Writing a will or setting up a trust is just the first step in organizing your estate. For instance, think of your estate planning trust as a box. If you want the protection and benefits offered by the trust, you must place your assets and affairs inside the box. And, you do so by properly titling your assets. Any of your financial assets that are not properly titled or contain incorrect beneficiary designations may fall outside your trust and estate plan wishes.

Here are some tips to consider…

The beneficiary section could be filled out as such: Primary Beneficiary: My children Ms. Alice Doe, Mr. John Doe Jr., and Ms. Gloria Doe equally, per stirpes.

  • When you begin to look for and review beneficiary designation forms, remember to add employer-sponsored financial accounts to your list as well.
  • “Per stirpes” (Latin for “per branch”): The majority of beneficiary forms assume per capita not per stirpes distribution. gives the following example: “It specifies that each branch of the deceased person’s family will receive an equal portion of the estate. Assume the client has a married daughter who has either died or wants to disclaim a portion of the inherited IRA to her children. Without the words per stirpes, the predeceased or disclaiming daughter’s share of the IRA would not go to her children, but rather to her siblings on a per capita basis where named beneficiaries receive an equal share of the estate.”
  • Beware of “substantial compliance.” If a family member who you wish to leave out of your life insurance contests the beneficiary form and the judge finds you haven’t substantially complied to the insurance company’s requirements, that family member could, in fact, win some or all the life insurance benefits. The cure, keep your beneficiary forms and estate plan documents up to date and accurate.
  • Double check what your financial firms, banks, insurance companies, etc., have on file regarding your beneficiary designation form. Make sure they’re aligned with your plans. Whatever, the companies has on file is what they will follow, not what you think they “should” have or what’s filed in your desk.
  • Review your financial power of attorney, as well. For instance, should this person have sole power to change your beneficiaries? Make changes and corrections now, while you still can.
  • If you want your retirement plan beneficiary to be someone other than your current spouse, have your spouse sign a waiver, otherwise by law the money will still transfer to your spouse.
Whatever you do, do not disregard the simple looking beneficiary designation form. says, “… Beneficiary designation forms are estate planning documents and should be handled just as you handle your will or trust. “ Make sure these forms are aligned with your estate plan and support your wishes.
There’s a growing army of predators and parasites that are increasingly bent on taking what belongs to others – it is important that you start to build your defenses now.