When there's a will, there's still a way to have a complete mess!

Oct 10, 2013 | Wealth Management

Regardless of how well worded your will, or how exquisite your trust, if you forget to update your beneficiary designations on your retirement plans and insurance policies, you are leaving a potential disaster.

Warren Hillman died in 2008.  He had been divorced for 10 years and had since remarried.  Enter a life insurance policy with the ex-wife named as beneficiary.  Who gets the proceeds, the ex-wife or the widow?  You guessed it, the ex-wife!  I bet the widow was thrilled! 

There are several other examples where having an updated beneficiary form could have saved a lot of time and legal fees:
The well-known William Kennedy case
Holmes v Kent
Egelhoff v Egelhoff

The famous “Pension Pickle” case.  Yes, the surviving husband sued.  He lost.  Yes, he appealed.  He lost again.

Moral of the story….take the time to review your beneficiary designations.  Federal law mandates the spouse as the designated beneficiary of a 401k unless the spouse consents in writing to an alternate designated beneficiary, however, it becomes more problematic when IRA’s and life insurance are involved.

If you would like to discuss your situation in more detail, give me a call at 859-233-8929.

Jeff Schriefer
VIce-President
Wealth Management
Bank of the Bluegrass & Trust Co.
jschriefer@bankofthebluegrass.com
 

Lexington, KY Wealth Management, Investments, 401(k) rollover, stocks, bonds, planned giving


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