skip to main content
planning across the spectrum logo - special needs certified financial planning services connecticut
  • Posted February 5, 2017

THEY DID WHAT????!!!!!

I think it’s safe to say we’ve all either been in a position to say this, or know someone who has. This article is specifically focused on the titling of your estate. Far too often, in my opinion, there is conflict or confusion about what to do when someone passes away, and which is the last thing anyone should have to deal with when mourning.

Why does it happen? I think many of us just take it for granted everyone knows what we want, if we think of it at all. When I was Active Duty I was required to have a Will created before deploying, yet we never took the time to get one for my wife – just didn’t seem important back then. Even after she passed, it took me almost a year to get my estate documents prepared – and I lived it. The idea of our mortality is sobering, as it should be – but it shouldn’t be something to be afraid of, or taboo.

To be sure, it can be an uncomfortable conversation. Many of my clients have asked me for a “script” to approach their parents, acknowledging the irony they themselves don’t have plans. Unfortunately, it’s not enough to just “have the conversation” – action needs to be taken. So create a checklist with dates, and find somebody to help hold you accountable.

A good place to start is ensuring all your accounts have primary and contingent beneficiaries. Why contingent beneficiaries? Because it answers the question of what to do if something happens to both you, and your primary beneficiary.

If you have minor children, then you should have a trust. You don’t need to fund it, discuss with an estate planning attorney if a testamentary trust will be sufficient – it’s how I have mine set-up. Children cannot manage money, and it could be argued, to some extent, the same is true of  many young adults (< 25 years of age).The trust addresses and solves this problem, and because trusts are legal entities you can make them the primary or contingent beneficiary of your accounts.

Another situation I see far too commonly is not changing beneficiaries after a divorce. If you don’t remove your ex-spouse as a beneficiary, they are legally entitled to receive that money. I’m not an attorney, I don’t know the optimal time legally to change beneficiaries – but once the divorce is finalized I wouldn’t hesitate too long; unless there is something specific in your agreement or decree specifically addressing this.

Again, I want to acknowledge how difficult and overwhelming this can seem. As I stated above, it took me almost a year to get my estate documents in order after my wife passed away. Commit to a date you’ll have everything done by, doesn’t have to be this month but it does need to be this year. I wouldn’t put it farther than (2) months out, because it becomes too easy to ignore and delay. Once the date is set, talk to trusted friends and advisors – ask for referrals to estate planning attorneys.

Yes – you can use online resources like LegalZoom, but I would still have those documents reviewed by an attorney – because you want to make sure they meet the requirements for your State. Ensure the individual who will settle your estate, at a minimum, knows where to find your documents; perhaps even give them a copy. As a general rule you’ll want to review your estate plan every 3 – 5 years, or when you have a significant life event (birth of a child, divorce, etc). If/when you update your plan, be sure to destroy ALL the copies of the old one.

Speaking for myself, going through the process sucked. It did, not gonna sugar-coat it. But, and this is a huge BUT, when it was all said and done I felt like an enormous weight was lifted off my shoulders. You don’t have to do it alone, I offer to go with my clients when they meet with the attorney – and I’m sure most, if not all, of us have friends and/or advisors who will do the same.