Money Matters
hoffse
member
Dear Community,
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
PSA: Beneficiaries
In the retirement thread I mentioned checking beneficiaries on your accounts annually. This should be one of your annual chores like spring cleaning or checking the batteries in your smoke detector.
Why?
Because the beneficiaries listed on an account TRUMPS your will. That's right. Writing your ex-spouse out of your will doesn't do a damn thing if most of your assets are in bank accounts and you don't change the beneficiaries there too. It doesn't matter how great it might feel to "disinherit" them... if you don't change your beneficiaries too, your efforts probably didn't work.
As you probably know, divorce levels skyrocketed in the last half of the 20th century. That's because no-fault divorce became a thing. It previously wasn't a thing, so getting a divorce was hard because you had to show cause. Well now it's (relatively) easy since you don't have to show cause, and that's why divorce rates are so high. The boomers are the generation that really started it. As the boomers have started to die their accountants, bankers, and lawyers have realized that this beneficiary rule has really messed up their estates because the boomers apparently grew up believing that their will was the final say in the division of their assets. That's just not true, and there have been boatloads of lawsuits between ex-spouses and widow(er)s fighting over this very matter. Well guess who wins in virtually every instance? The ex-spouse. S/he walks away triumphant and the person who the decedent really intended to inherit didn't.
These rules are unlkely to change, even though it generates a perverse result. Why? Because your bank probably operates under the laws of a state in which you don't live (South Dakota is a popular choice). So even if your state changed its rules to allow your will to triumph, what happens if South Dakota hasn't changed it's rules too? Exactly. There is confusion. And I can tell you - South Dakota has made a lot of money with banking, so it won't change its laws anytime soon. Think about why: the cost to a bank of waiting for wills to be probated before distributing assets is pretty huge, actually. They could be liable if they sent that money to the wrong person because a shady executor told them to do it, and they followed the executor's directions because he "had authority" under the will. What if he's lying? What if he's pocketing it? It's vastly easier for them to operate if they know they can distribute funds to the beneficiary that the account holder named on that account without risking a lawsuit. Result: it doesn't matter where you live; odds are your state gives priority to the beneficiaries named on your accounts, rather than the heirs named in your will.
Thesis: thinking about death is morbid. But it's inevitable, so it's smart to try to cover all your bases. If you are divorced or you have married somebody previously divorced, keep the beneficiary rules in mind when generating your financial plan together. If you have parents, siblings, close friends, etc. who are divorced or who have married somebody previously divorced, I think it's also worth mentioning to them (if you are comfortable doing so). Way too many people "write' their own wills on legal zoom these days instead of talking to somebody who knows about this sort of thing, and it's only going to make the problem worse.
Re: PSA: Beneficiaries
It's really hard and you can't even count on an attorney being able to get you the money if you have separate accounts. I came to BOA with a letter my attorney wrote that basically said I'm the administrator of his estate and I'm in need of the money. I had to take over paying bills and house payment, etc! I about had a break down in the bank. I looked at the teller and asked her what the hell I was supposed to do with all these bills coming due! Luckily I remembered from when his mom passed, you can take his atm card and take out the maximum amount of money from the atm until they locked his account because he deceased. I did that every day until they locked it. That got me until I got the death certificate, which was 2 months after he passed. That death certificate is like liquid gold to getting money. So just an FYI to those that have separate bank accounts, remember you can take that money out of the ATM because POD does shit for you.
Awesome post all around! So helpful!
Yes, "payable on death" listings on bank accounts are tricky. But, because the banks have been victims of fraud so much, and account holders have too, banks cannot give out money unless they have a legal document stating a death. It really stinks. As a banker in my pre SAHM life, I faced a few situations of accounts listings legitimate PODs, but no death certificate had been presented yet and my hands were tied.
I have also seen someone come into my bank, claiming someone was dead and trying to get their money (but they weren't really dead). But, because of the "no death cert, no money" rule, we stopped the fraudster.