Beneficiary Designations

Helping Parents Be Sure Their Families are Protected

Published on: September 30, 2019 | By McCulloch & Miller, PLLC

Yes, it is old-school, but if your family is on the traditional side, headed up by a breadwinner dad who runs the finances, then you need to make plans to ensure that your family will be okay, if something should happen to you.

This advice also applies to mothers who are the main breadwinners and run their family’s finances, even though the title of this Forbes article is “How Fathers Can Make Sure Their Families Are Financially Protected.”

Do you have enough life insurance? Be sure you’re adequately insured, so your family won’t struggle to pay the bills without your income. Many employees only have enough life insurance from work to cover a year’s worth of salary, which may be enough for some families. However, if your spouse can't make the mortgage payment on their own, and if they would be unwilling or unable to sell the home, you might want to at least make sure you have enough life insurance to pay off the mortgage. Once you know how much you need, buy a low-cost term policy for the maximum length of time you might need the coverage.

When Is It Time to Update A Will?

Published on: July 23, 2019 | By McCulloch & Miller, PLLC

Notice that the title is not “if” you need to update a will, but “when.” A will is like the family pet—it can protect the house and demonstrate your love for your family. However, you have to take care of it.

People often comment when they complete their estate planning, that they feel so good to have done this very important task. It’s a great feeling to know that you’ve made the necessary preparations to protect your family and preserve your legacy. However, this is not a one-and-done event.

Thrive Global’s recent article, “7 Reasons Why You Need to Review your Will Right Now,” says it’s extremely important that you regularly update your will to avoid any potential confusion and extra stress for your family at a very emotional time. As circumstances change, you need to have your will reflect changes in your life. As time passes and your situation changes, your will may become invalid, obsolete or even create added confusion, when the time comes for your will to be administered.

These Money Mistakes Add Up Fast

Published on: July 22, 2019 | By McCulloch & Miller, PLLC

It’s not how much you earn, but how much you keep that makes the difference in lifestyle and retirement. Keep more of your hard-earned money, by making fewer money mistakes.

Some of the most common money mistakes cost thousands of dollars. All you need to do is pay attention to avoid them, says Motley Fool in the article, “5 Money Mistakes You Probably Don't Even Realize You're Making.” See if any of these sound familiar and take control of your financial health today.

No clue to recurring charges. Unless you regularly review your credit card bills, you can easily miss monthly charges that you don’t need, like not cancelling a gym membership. Some automatic monthly charges increase over time, which you won’t notice unless you’re checking those bills.

What Single Parents Need to Know About Estate Planning

Published on: June 12, 2019 | By McCulloch & Miller, PLLC

Estate planning requires making some of the most important decisions a parent can make for their child’s well-being.

Single parents need to plan in advance for what will happen to their children, whether they are minors or adults. That includes preparing for the parent’s incapacity, as much as it does for their passing.

Talk to a qualified estate planning attorney and let him or her know your overall perspective about your children, and what you see as their capabilities and limitations. This information can frequently determine whether you restrict their access to funds and how long those limitations should be in place, in the event you’re no longer around.

5 Biggest Mistakes of Beneficiary Designations

Published on: April 25, 2019 | By McCulloch & Miller, PLLC

There’s an easy way for select assets to be passed to heirs, with no need for probate. It’s called the beneficiary designation.

Your will is a document that is used to pass property and assets to your heirs, but it’s not the only way.

Certain accounts or assets have beneficiary designations, where you provide instructions on who is to receive assets when you die. Most people don’t realize that the beneficiary designation is more powerful than the will, and directions in a will are overruled by the beneficiary designation.

Make the Most of Life Insurance

Published on: March 25, 2019 | By McCulloch & Miller, PLLC

Life insurance is the bedrock of many people’s financial plan. There are more nuances to life insurance, than just buying a policy and paying premiums.

It’s not the most fascinating topic, unless you’re in the business, but understanding the basics about life insurance can have big implications for you and your family, according to a recent article, “4 questions to ask to maximize your life insurance benefits” from WTOP. Here’s what you need to know about life insurance:

Changed Circumstances. The amount of life insurance you need, is unique to each person’s financial and family circumstances. Remember that life insurance death benefits are used for more than just replacing immediate income from the family breadwinners. They can also pay off the mortgage and other debts, cover college tuition, create a retirement nest egg for a surviving spouse, fund a business transfer, or be an important estate planning tool. With life insurance, you can protect your family against a premature death with a solid safety net. In the event of divorce with future child and spousal support obligations due to you, you’d want your divorce settlement agreement to say that your ex-spouse, as payor, maintains a sufficient life insurance policy naming you, as the recipient-beneficiary, to cover all future commitments. You also need to be notified by the insurance company of any policy changes or lapses because you may be depending on this money in the future, should something happen to your ex-spouse. Stay-at-home spouses and caregivers also need life insurance, because replacing their duties could incur many unexpected costs for the survivor.

When Does an Estate Plan Need to Be Reviewed?

Published on: March 13, 2019 | By McCulloch & Miller, PLLC

People think of estate plans as one-off documents, but they should think of them more like cars. Estate plans need maintenance, oil changes, tune-ups and if there’s an accident, repairs.

As life progresses, you’ll go through a number of stages, from being a teen to an adult, getting married, retiring, welcoming grandchildren and more. Every time you move through a stage, your estate plan should too.

Bankrate’s recent article, “Estate planning triggers: When to re-evaluate your estate planning strategy,” says the risk of not having a current estate plan and will that state your wishes is significant. When people fail to put any plan into place, it leads to confusion, chaos, and unintended consequences. Use this list of important life events as triggers to remind you to discuss your current situation with a trusted attorney.

How Life Insurance Works Best in an Estate Plan

Published on: February 15, 2019 | By McCulloch & Miller, PLLC

Life insurance can help heirs avoid having to incur expenses like estate taxes, funeral costs and similar expenses. However, it also gives heirs breathing room, so they can make the best use of other assets.

Here is an example of how life insurance should work. A father, Howie, dies and leaves a large estate to daughter Eva. The estate is large enough that it triggers a huge estate tax. However, the bulk of his assets are tied up in an IRA and real estate properties, some of which could be put on the market quickly, but not quickly enough for tax deadlines.

With that scenario, Eva might not want to immediately force a sale of the real estate. However, if she accesses the inherited IRA to raise money, she’ll have to pay income tax on the withdrawal and lose a terrific opportunity for extended tax deferral.

Millennials Need an Estate Plan Too

Published on: January 29, 2019 | By McCulloch & Miller, PLLC

Live long enough, and you learn that life can change in a heartbeat. Young adults don’t always know this, but they need to have an estate plan as much as older people.

Whether you are a Baby Boomer or a Millennial, you need to have an estate plan. With the help of a good estate planning attorney, someone in their 20s and 30s can get their estate plan done easily enough. Even if they think they’re immortal, says Wealth Advisor in, “Estate Planning Isn’t Only for the Old and Wealthy,” young adults need estate plans.

First, people can draft a will to provide directions regarding what happens to their assets, such as who will inherit both financial and personal items. Virtual assets like social media accounts should also be included. You should make a list of usernames and passwords for all your accounts and be sure that a trusted relative or friend has access.

The Difference Between Per Capita And Per Stirpes – Beneficiary Designations

Published on: January 17, 2019 | By McCulloch & Miller, PLLC

Out-of-date beneficiary designations could completely undo your entire estate plan. It happens often, since people often neglect these ‘fine print’ details.

We hope that you have a will to ensure that your assets are distributed according to your wishes after you pass. However, if you are like most Americans, many of your assets are not distributed through your will, but through a beneficiary designation, which you may have not thought about since opening up the account, retirement account, 401(k), IRA or SEP or taking out a life insurance policy. A word of warning: regardless of what’s in your will, the beneficiary designation takes precedence.

Benzinga’s recent article addresses this question: “Estate Planning: What Are Per Capita And Per Stirpes Beneficiary Designations?” Have you changed the beneficiary designations, since the account or policy was first started? If you need to update your beneficiary designation, talk to the company responsible for maintaining the account. They’ll send you a form to complete, sign and return. Keep a copy for your own records.