Wills, Beneficiaries, and Preparing for the Unexpected: Why does it matter?
Jason* is a vibrant, career-oriented professional who’s going places. He’s living the life he wants and doing it on his terms. He has a great paying job doing work he loves. He’s able to afford the home he wants and drives a smooth all black Ford Bronco with all the bells and whistles. He travels for fun and goes where he wants. Jason is also 32 years old and died unexpectedly this past March while traveling with friends in Utah.
Morgan* is a 21-year-old new mother with an eight-month-old daughter. She and her husband live off a rural road outside of city limits about 20 minutes from her job at the local hospital where she works as a phlebotomist. On her way to work at 6:30 a.m. the second Friday in May, a tree fell across the highway as she was driving down the county road. Morgan was unable to swerve in time and hit the tree head on dying instantly according to emergency personnel at the scene.
These are just two incidents that we are aware of that have happened to Kelly Community members, or their family members, in the past few months. Each story has ongoing effects that their families are dealing with attempting to legally close out their estates. The sad reality is that in the midst of the grief loved ones are going through, they have the added burden of the legalities of death that have to be dealt with. If the deceased didn’t take the proper steps to prepare, the burden can easily turn into a nightmare for the already overwhelmed surviving family members.
Jason followed the many steps necessary to protect his identity and accounts. And like so many of us, he used his smartphone to track all of it: his account numbers, his logins, and his passwords. While the old school ways would be to watch a person’s incoming mail for bills and bank statements, Jason was living a completely paperless life. When Jason paid for items or shared expenses with friends, he was using apps like Apple Pay, Google Pay, and Venmo who mask your account information to protect you from fraud.
Unfortunately, because of this technology, Jason’s parents have no idea who he banked with, who holds the mortgage on his home, or who his vehicle is financed with. They have no way of tracking down whether he had money in a savings, checking, or retirement account, and if they could find those accounts, whether there is enough money in those accounts to make it worth their while to find an attorney to access the accounts so that they can settle his estate. In the meantime, they have had to take on the financial burden of getting him home to Texas for his funeral and trying to protect his assets until the time that they can settle his estate.
In Morgan’s situation, she and her husband had set up joint checking and savings accounts but failed to set up a Payable on Death (POD) beneficiary for their account. Their account was set up as a joint account without the right of survivorship rather than as a joint account with right of survivorship. Because of this, their joint account was frozen as soon as Morgan died, and her husband has not had access to their account that both of their paychecks are automatically being deposited to. Morgan’s husband is having to rely on friends and family to lend him money to pay their bills until he can get his paycheck set up to deposit to a new account that only has his name on it. Meanwhile, their joint account will remain frozen until he is able to present a state issued death certificate and other document to replace the will that was never made by Morgan.
These are situations we hope to never find ourselves in, much less be the one who has died unexpectedly before we’ve lived a full life. Yet, for some, life is fleeting and over much too soon. The question to ask yourself is this: If you were to die unexpectedly, would your family be able to settle your estate, or would they be left with the expenses of hiring attorneys to get court orders appointing them as executor of your estate so that your information can be released?
There are remedies for these situations that can prevent the additional burden and heartache for your friends and family members. First and foremost, set up a will that describes your wishes for how your assets and belongings are dispersed and name a trusted person to act as the executor of your will and estate. The executor of your estate is the personal representative that you appoint to carry out the wishes of your will. They present the will to the courts, manage, and protect the estate’s financial assets, pay any outstanding debts you might owe, and distribute the remaining money and property according to the terms of your will.
The best way to legally protect yourself and your belongings is to seek the advice of an attorney. However, there are online platforms that can assist you in setting these items up at a reduced cost.
Another step to take is to fill out a guide such as this Bereavement Checklist that will communicate to your survivors what policies and assets that are part of your estate. Once you have filled this guide out, keep it in a safe place and share how it can be accessed with your trusted personal representative or the executor of your will. As you work through this guide, you will fill out information that will provide the necessary information to contact your financial professional, insurance agent, attorney, accountant, and your employer.
All these institutions/organizations are required by law to protect your information and unless your personal representative can present a will designating them as your executor or show other state-approved documents, none of your information will be released to them. Like the family members mentioned earlier, they will not have access to your insurance policies or financial accounts. Should this happen, then all your accounts will have to go through the process of escheatment. This is when the state you reside in claims and becomes the owner of your accounts for a set period of time (three years in the State of Texas) before making them available as unclaimed property, at which time your estate can claim it.
While it’s not the most pleasant thing to think about, spending four to six hours now correctly setting up your will and estate can save your loved ones months, or in some cases, years of work to correctly access and settle the estate you leave behind.
What they are losing most is their treasured loved one: a child, a spouse, a best friend. Their grief is not something they are going to be prepared for, but you can make that time easier by preparing your personal finances for them.
*Names and circumstances have been changed to protect the privacy of these individuals.