Three Rules You Can Live With

In a recent column, I related an earlier experience in finding missing money that I hadn't even known was "missing."  I urged you to visit the same website where I found the treasure to learn whether or not you had some unclaimed money.

One of my respondents volunteered that he and his wife were doing some genealogy on their families and came across a hit on an insurance policy on her late father that had gone forgotten.  It set off a memory about mementoes from her father's estate which included a poster-size, embossed policy certificate.  That turned out to be the proof needed to claim the dormant funds. No, it wasn't a million dollars; in fact, the total sum was less than a thousand, but it was missing money that the daughter was entitled to, and she promptly took the necessary steps to claim it.

Having the story related to me brought an idea that will be the topic of this column.  We have an obsession with privacy that sometimes inhibits our disclosure of sensitive facts to those who need to know.  If a person is named as the beneficiary of an asset upon the death of the owner of that asset, they must be made aware of the bequest. 

The rights of passage are done through the making of a will or a trust, but many of us neglect to take that important step.  A spouse usually knows about the assets of their husband or wife, but the children of the marriage are too often left out of the process, and have no idea what they are entitled to when one or both parents die.

Rule Number One: Make a will, or some instrument to make certain your wishes for inheritance are carried out.

I leave it to you as to how you do that, but unless you have a very small estate, you should at least consult an attorney.  Online wills are fine for estates under $100,000, but larger ones need more work and expertise.

There is nothing to prevent you from advising your children, or any other heir, about your assets.  If you love them enough to leave something, you should also trust them enough to keep your confidence.  They should know if they are secondary beneficiaries on insurance policies or any other financial account, such as a bank account or mutual fund.

You don't have to tell them the worth of the asset, but provide them with the account number and the holder of the funds.  It will make it so much easier to deal with in the event of your sudden demise.

Rule Number 2: Make a list of all of your and your spouse's financial accounts with account numbers. 

You needn't show amounts in the accounts, they will change anyway.  Give a copy of the list to each designated primary and secondary beneficiary, and advise them to keep it in a safe and secure place, such as a safe deposit box.

If you have a "broken" family, that is, not all members get along with you or with each other, you might want to make different lists for each beneficiary showing only the accounts wherein they are entitled.  It is unfortunate that there are many families in this category,  When the separation is dire, you might want to forego Rule 2 and just make the will in Rule 1. 

Rule Number 3: If any life events change, make sure you update the will and the lists.

Life events include any births, deaths, marriages, divorces, adoptions and separations. They also include any changes to the accounts listed, or any new accounts added. Any of these events might call for a revision in beneficiaries, so make certain that the will and your lists are changed accordingly.

There you have it.  These three rules, when properly executed, can ease the burden that loss of a loved one brings.  They also will prevent the loss of property to the state that rightfully belongs to your heirs.