Update Your Beneficiaries
Who are the beneficiaries on your accounts and policies? When was the last time you looked?
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Full Transcript below:
00;00;00;00 - 00;00;32;20
Unknown
Welcome back to 30 Minute Money. It's the podcast that delivers action oriented, smart money ideas and bite sized pieces. Scott Fitzgerald here with you once again to chat with Steve Wershing of Focused Wealth Advisors. Talking about some stuff. Talking about stuff. Nice to see you again, Scott. Nice to see you as well. this is something that actually I really wanted to learn more about because, my folks are getting up there in age and my wife's folks are getting up there and age and stuff.
00;00;32;20 - 00;00;54;10
Unknown
So, talking about beneficiaries and yes, we are very interested in this subject, so. Yeah. Well, it's and it's good that you're thinking about it because we are in our business. You know, we've had 4 or 5 clients passed away in the past year. And so we're in the middle of working with the, with the executors to distribute those estates.
00;00;54;10 - 00;01;13;02
Unknown
And so it's on our mind at the moment. And, one of the we know we meet with clients twice a year, and there's a set agenda for each round. And in the spring, one of the things that we do is we we update everybody on where their estate plans are, and we run through who their beneficiary designations are.
00;01;13;02 - 00;01;31;22
Unknown
So it's present to me now because we've been, you know, generating all those lists now. Yeah. So I thought it would be a good time to remind everybody that, checking on your beneficiaries every so often is a really, really important idea. So what do you mean, checking on them? Like, seeing if they're okay or making sure that everything is correct in your.
00;01;31;22 - 00;01;47;24
Unknown
Yeah, making sure the paperwork is okay. I don't know if you're typically beneficiaries would be family members or close friends. So if something was going wrong with them, you'd probably know about it, right? That's what I was wondering. But the question is, you know, what does your paperwork say? Okay. And so that's that's what we that's what we mean by checking the beneficiaries on the account.
00;01;47;24 - 00;02;18;29
Unknown
So let's just back up for a minute and talk about what a beneficiary is. So, certain kinds of, accounts, certain kinds of products, have named people who who, will receive what's in that account. If anything happened to the person who owned it. So retirement accounts, for example, have beneficiaries, insurance policies have beneficiaries. there are certain kinds of accounts, if you want a taxable account not to go through your estate, not to go through probate, then you can make them what's called a transfer on death account.
00;02;18;29 - 00;02;40;05
Unknown
And instead of going through your well, they'll just go direct to, to whoever you name, just like, retirement plan with so and so the beneficiary is the, is the, the person or the organization who receives all that when, when anything happens to you. Got it. and, you know, picking them in the first place is not typically all that hard.
00;02;40;05 - 00;03;03;07
Unknown
People know I want everything to go to my spouse, or I want things to go to my kids or whatnot, but things change. And this is also present to me because, am I doing what I was, you know, trying to walk my talk? You know, I, I checked on my own beneficiaries and, as I was getting ready for this round of client reviews and realized that my ex-wife was still primary beneficiary on 3 or 4 of the accounts.
00;03;03;07 - 00;03;42;20
Unknown
So so it's it's a good things change over time. You know, people move on and people pass away and relationships change. And so, so it's important to go back through that and and review who's on there to make sure that it is currently who you want to receive those assets. Now, one of the things that, one of the reasons to review it is that often if you've got little kids, if you've got minor children, when you have retirement accounts or an insurance policy, typically you would not name those kids as the beneficiaries directly because you don't want some little kids suddenly getting, you know, half a million bucks.
00;03;42;22 - 00;04;03;16
Unknown
you would probably you might name a trust or you might name a, an account that has a guardian on it or something like that for those kids. But those kids grow up. Yeah. And, you know, they become adults and, you know, you could change it from the trust to those people directly. And so that's a good reason to review, to review those things.
00;04;03;18 - 00;04;26;10
Unknown
and in fact, as they continue to get older, when, if you're, if you're leaving things to adult children, I mean, if it were if you have adult children who are actually getting closer to retirement themselves, sometimes you don't necessarily want to name them directly. We're in the middle of a case now where there were, two sons of a client who are named as 50, 50 beneficiaries on their mom's account.
00;04;26;10 - 00;04;56;11
Unknown
Well, mom is 92 and their sons are in their late 50s, early 60s. And in talking with their estate attorney, it makes a lot more sense to name a trust to be the beneficiary of those accounts, as opposed to to the two sons directly, because it enables you to do some estate planning right in there. So, if one of them is disabled, if one of them is receiving government assistance because they're a nurse, a nursing home or something like that, then you won't mess all that up by leaving them a whole bunch of money.
00;04;56;11 - 00;05;10;26
Unknown
So, when your when your kids are little, it might be going into trust for them. And then when they become adults, you might want to make them the beneficiaries directly. And then when they get older you might want to go back to a different kind of trust. So that's what those those are all reasons are real life right there.
00;05;10;27 - 00;05;37;04
Unknown
Yeah there there it is. Exactly. So it's interesting. Yeah. So it's so anyway, it's it's a, it's a quick message today, but the message is just, you know, every few years you should go back and check on that, make sure it's still what you want. Yes. I mean, I have, I have a friend who his, his parents have, had a falling out with the the oldest daughter in that family.
00;05;37;06 - 00;05;56;17
Unknown
And so they were kind of working at removing her as a beneficiary to all of those things. So, Yeah. Yeah, we have stories of, you know, adult children who end up with substance abuse problems or something like that. And, you know, they say, well, look, you know, I, my son might be irresponsible. I don't want my grandson to have to pay the price for that.
00;05;56;17 - 00;06;15;28
Unknown
So they would change the beneficiary to trust for the grandson. Or you have people who, you know, have, you know, get into messy divorces or that kind of stuff. Well, we don't necessarily want to leave a lot of money to that person directly right now because, you know, it might get litigated away. So we might, you know, make the grandchildren beneficiaries or put it into a trust or something like that.
00;06;15;28 - 00;06;27;12
Unknown
So there are all kinds of reasons that film things change in life, and that all of that needs to be reflected in your estate plan so that things stay current.
00;06;27;14 - 00;07;02;08
Unknown
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00;07;23;22 - 00;07;53;00
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00;07;53;02 - 00;08;13;24
Unknown
And what's your 30 minute action item? 30 minute action to make a list of all the accounts you have that have beneficiaries and check on who those beneficiaries are. All right. Thanks for joining us on 30 Minute Money three zero Minute Money. You can find us on all the podcast platforms Steve at Focused Wealth advisors.com and I'm at RocVox.com.
00;08;13;29 - 00;08;35;10
Unknown
We'll catch you next time. It's 30 Minute Money.