Beneficiary Designations

Avoiding Estate Planning Mishaps

Published on: November 16, 2015 | By McCulloch & Miller, PLLC

In many cases, knowledge is power. But in estate planning, knowledge by itself can be a dangerous thing. You need to pair knowledge of the most common estate planning mistakes with another kind of knowledge: what to DO about those mistakes. And we would even add a third thing: knowing WHO to ask for help!

For example, you might know that it is desirable to avoid probate, but that is of little use unless you also know how to create an estate plan that will keep an estate out of probate. For the same reason it is important to not only know what common estate planning mistakes are but also to know how to avoid them.

A recent article by The Street entitled "How to Avoid the Most Common Estate Planning Mistake" discusses the most common mistakes and how to avoid them. Tips from the article include:

Are Bitcoins Part of Your Houston Estate?

Published on: August 14, 2015 | By McCulloch & Miller, PLLC

To the digerati – the elite of the technology world – Bitcoins are as valuable as the dollar or any other state-sponsored currency. But the rules are still under development for estate planning purposes, and planning for an estate that includes Bitcoins must take this into account.

Most people know what Bitcoins are, even if they don’t use the digital currency that has become popular in the online world. The theory behind Bitcoins was that the world was ready for digital currency, an electronic peer to peer cash system that would eliminate the use of money created by countries.

Bitcoins were to be untraceable and uncontrollable by any government.

Are Your Houston Beneficiary Designations Current?

Published on: August 12, 2015 | By McCulloch & Miller, PLLC

For many Americans, the majority of non-real estate assets are their retirement accounts and life insurance policies. However, a large number of people forget to update their designated beneficiaries, which can lead to key assets going to unintended beneficiaries. An unusual fact pattern cited here reminds us of the importance of keeping beneficiary designations up-to-date.

Like millions of hardworking Americans, Austin Hardy's employer managed his retirement plan. Hardy may have been absent on the date that the HR department explained the importance of naming a death beneficiary for his plan; he either forgot or neglected to designate a beneficiary.

When he passed away, Hardy’s employer did the right thing: it followed the default rules of the plan. Those rules stated that if no surviving spouse or partner existed, then the plan should pass to a surviving child, whether biological or adopted.

Divorced? Update Beneficiary Designations

Published on: June 12, 2015 | By McCulloch & Miller, PLLC

Fran had just learned that her deceased husband Ed’s life insurance proceeds were going to be paid to his ex-wife Sally. As Fran found out from her lawyer, beneficiary designations can be the trump card of estate planning.

You heard that right. The ex-wife Sally will get the life insurance proceeds. It doesn’t matter what the will says in these circumstances. With certain financial instruments the beneficiary designations have authority to control the asset disposition regardless of other provisions.

A recent WMUR article, titled “Money Matters: The trump card of estate planning,”sets out a handful of good pointers to remember.

Houston Families: Do Your Beneficiary Designations Align With Your Will?

Published on: October 10, 2014 | By McCulloch & Miller, PLLC

One of the colossal failures in estate planning I witness when people make their wills is not coordinating the will with the overall beneficiary designations they have chosen.

Does your will surpass your beneficiary designations on financial accounts?

A recent Wall Street Journal article, titled "How People Undermine Their Own Written Will," explains that most people believe that their written will take priority and supersedes the beneficiary designations on their investments. This isn't true. When you designate a beneficiary on a life insurance policy, a 401(k) plan, or an IRA—that is a binding contract. The basic tenants of contract law apply just as it would in a mortgage or a sale. What this means is that if you stipulate in your will that you want to leave your IRA to your brother and the beneficiary designation form of your IRA says that it is all supposed to pass to your sister, then your brother is out of luck. Despite your explicit instructions in your will, the IRA will go to the named beneficiary.