Spouses: Make Sure You Have Beneficiaries for Your Accounts.

If you and your spouse keep separate financial accounts and/or retirement accounts (for whatever reason), please make sure you have a beneficiary designated for these accounts.

Nearly every financial product, whether it be life insurance, annuity, IRA, brokerage account and even your basic run-of-the-mill savings account at a credit union has a payable on death provision available for you to indicate who should get the funds in that account when you die.

This is even more important between spouses especially if you want your spouse to get the funds after you die. (Well, it really isn't more important, but it is just more painful when a surviving spouse has to deal with this when it could have been taken care of.) You would be surprised how many men have accounts opened up and fail to designate a beneficiary and leave their widow at the mercy of the financial institutions.  Or maybe I am just the one who gets surprised when it happens to clients.

Sometimes you may not want your spouse to be the beneficiary, but in some states you may not have a choice especially in a community property state. If it is a separate property account, it is still a good idea to have beneficiaries named to make your wishes known when you die. If it is not separate property or you think you have a community property interest in that account, some states have procedures to petition for your share. In California, it is called a Spousal Property Petition.

As always, if you have questions about naming beneficiaries, talk to an estate planning attorney or other advisor for guidance.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Comments

[Jerrold Bartholomew]

At some point, most couples need to move beyond sweetheart provisions and toward disability planning. By this I mean that cross-designations of beneficiaries can have the unintended result of leaving assets that could have been transferred to other family members exposed to the cost of long term care. Is it permissible in Calfornia to disinherit one's spouse in this way? In Michigan, we generally advise changing beneficiaries to other family members at the time an asset protection estate plan is developed. See www.michiganelderlaw.wordpress.com.

[Jerrold Bartholomew]

This is just a quick note that any follow up to my comment above can be addressed to me at my new website: www.michiganelderlaw.info.

Best,

Jerry Bartholomew