Suddenly You… Are flying across the ocean, hit turbulence, and regret not updating your beneficiaries before you left.
Recently, my husband and I flew to Hawaii. We travel a lot together, and even though I know statistics show flying is safe, my mind can immediately wander to darker places when we hit turbulence over the ocean. I think it’s a reflex for MANY of us as soon as the captain turns on the seat belt sign and we feel that first bump.
This time when it happened to me, I started thinking about loose ends with our estate planning documents and beneficiaries.
Prior to our trip, my husband and I were sifting through some financial paperwork and discovered we hadn’t noted beneficiaries on a few of our accounts- probably thanks to a little procrastination.
I was relieved we caught it, but as I closed my eyes through the bumps as we flew over the Pacific, I couldn’t help but regret not wrapping it up before we left.
I tried to reassure myself. At least we had MOST things done.
Surprisingly, 63% of US adults have NO estate planning documents in place at all.
I get it. No one wants to think about death. Life gets busy, and it’s easy to let ourselves believe we have plenty of time to deal with it later.
Sadly, a LOT of people believe “Estate Planning” is for the wealthy, and something only the rich with physical “estates” and trust fund babies do.
This is absolutely NOT true
ESTATE PLANNING IS FOR EVERYONE.
And it can begin with something as simple as noting a beneficiary on your bank accounts.
What is a Beneficiary?
A beneficiary is a person who inherits your assets after your death. It is just one part of the bigger estate plan which we discuss in great detail in the Suddenly You Society. For now, we’lll discuss why beneficiaries are a terrific tool in that bigger plan.
Naming a beneficiary allows your property or assets to transfer directly to the person you’ve chosen—bypassing the probate process entirely. Probate, on the other hand, is a court-supervised procedure that can take a year or more, involves legal fees, and becomes part of the public record.
When a beneficiary is named on your bank accounts, 401(k), investments, insurance, etc., probate becomes irrelevant, and all assets are transferred rather seamlessly to those named on the accounts.
Do you have to name a beneficiary for every account?
Not necessarily, but it’s highly recommended if you want your loved ones to avoid the delays and complications of probate.
In our case, my husband and I definitely need to fix our oversight because it means access to liquid funds (cash, or assets easily converted to cash) for our executor (the person in charge of carrying out our wishes after we pass).
An executor needs access to liquid funds so s/he can pay any outstanding bills, credit cards, loans, etc. on behalf of the deceased. If our liquid funds were tied up in probate, it would be much harder for our executor to manage this process smoothly.
ACTION STEPS:
Have you assigned beneficiaries to your accounts, or do any need to be updated?
Put this at the top of your to-do list for this week if you can.
A transfer or payable-on-death designation can easily be added to your assets. All you need to do is complete new paperwork with your financial institutions. No attorney is needed.
Make it easier for your loved ones later by wrapping up your plans today.
You’ve got this!
