Monthly Archives: January 2015

Naming beneficiaries isn’t as easy as it sounds, p3

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Jan 20, 2015.

The weather in the Philadelphia area has not been as bad as last year, but we are still having a tough winter. Icy roads, multi-vehicle pileups, and a general sense of gloom this past weekend had many of us curled up at home with a book or a good movie. Not that there’s anything wrong with that, but wouldn’t those hours have been the perfect time to review and to update your beneficiary forms? For people with small children — or a dog, for that matter — winter weather probably means cooped up rather than curled up. If you were thinking about beneficiary forms while trying to entertain the little ones, perhaps you had an epiphany; perhaps you realized that, if you passed away while your children were still young, they would have a little trouble managing their inheritance. And that brings us to another mistake people make when designating a beneficiary. Mistake #3: Not naming a guardian for young children. This is an easy mistake to make, but, again, the consequences may go exactly counter to your intention. Say you name your children as beneficiaries, but you die before they turn 18. If you have not appointed a guardian, the court will appoint one for you. Remember, there is no default, go-to relative in these cases. The court considers all the facts and makes a decision that could be the last thing you wanted. Naming a guardian can, as one financial planner told us, keep the money out of […]


Naming beneficiaries isn’t as easy as it sounds, p2

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Jan 16, 2015.

You can think all you want about how you want your property distributed after your death. You can talk and talk about who will inherit your retirement accounts or who is the beneficiary of your life insurance policy. None of it will mean a thing if you don’t tell the bank or the insurance company what you want. They need to know, perhaps more than anyone, what will happen when you die, and they generally ask for that information on a beneficiary election form. Just naming a beneficiary, though, can put the insurance payout in the wrong person’s hands. Some mistakes can dramatically reduce the amount of money that goes from the bank to the beneficiary. There are common mistakes that we can all easily avoid. Mistake #2, continued: Not establishing financial controls. We left off in our last post talking about what can happen if you hand an irresponsible loved one even a moderate amount of money. The risk that the money will be wasted is only compounded by the fact that some assets will be added to the estate and, so, subject to Pennsylvania and federal taxes. One solution is to establish a trust and name that trust as beneficiary. In the trust document you can specify who will get distributions. It is also possible to specify when the beneficiary will get the distribution — say, his 21st birthday or the day she graduates from medical school. The trust will keep the funds out of the probate estate, […]


Naming beneficiaries isn’t as easy as it sounds

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Jan 10, 2015.

Now that the holidays are behind us, we can circle back to our discussion about naming beneficiaries for your 401(k) retirement accounts and life insurance policies. The title of this post is not exactly right: It is easy to name a beneficiary. It is also easy, however, to leave critical information out. And, as we said in our Dec. 16 post, a mistake here can mean the money you wanted your children to have will go instead to your ex-husband. Naming your children as beneficiaries is a little more complicated if they are minors or if you think they may not be good with money. Did they save their allowance or spend it right away? Do they share your values when it comes to, for example, college or homeownership? For a number of reasons, estate planning professionals recommend thinking twice before filling in your children’s names and filing the beneficiary form away. Mistake #2: Not establishing financial controls. Remember, your beneficiary will get a pile of money with no restrictions on how it should be spent or when it should be distributed. Philadelphia must have its fair share of 18-year-olds who would blow a windfall on a sports car when you had hoped she would use it for college or the down payment on a house. Without putting any controls in place, that kid — a legal adult — could go through the money in a day, rather than thinking of it as an emergency fund or the seed funds […]