In an effort to entertain and educate, I thought I would begin sharing some of my legal war stories* as they happen. This way you can learn from other folks' mistakes and maybe end up better off, in the end.
Most recently, I have been handling the probating of two estates. That statement is slightly inaccurate, however. For one estate (the wife's), I have only begun the process to determine whether probate will even be necessary. Despite what you may have heard, not all assets in an estate are subject to probate. However, it can often be difficult to figure which assets are and which are not. For example, the wife had an IRA and a 401(k), among her other assets. The IRA is not subject to probate, as she named her husband as a beneficiary. However, the 401(k) might be.
The 401(k) was administered by her employer. The company she worked for recently went out of business, and so I can no longer locate the plan administrator or any beneficiary designation forms. As such, I was forced to contact the U.S. Department of Labor and report the case. The agency will attempt to investigate and find my plan administrator, but they warn that it could take several months to do so, if they are able to find him at all. I also had to write a letter to the company managing the money and ask them what would be needed in the event we cannot find the beneficiary designation form. Hopefully, they will actually get back to me. The likelihood is that if a beneficiary designation form cannot be located, the proceeds from the 401(k) will be payable to the decedent's estate, and I will have to begin probate proceedings for her estate, at that point. Unfortunately, there is no way of knowing, and it is going to have the effect of delaying the full administration of both estates for several months.
This all could have been avoided if these people had kept all of their important documents together. Instead, they seemed to keep quite a bit of everything. The heirs are having trouble digging through the mounds of extraneous documents in the home and it is nearly impossible for them to discern what is important and what is just something that should have been thrown away years ago. As it is, the heirs barely found the Wills at all. If, however, these two had kept all their important documents together in one safe place, this could have all been averted. Important documents include: Wills, Trusts, Durable Powers of Attorney, Living Wills, Health-Care Surrogate Designations, insurance documents, beneficiary designation forms, current addresses and phone numbers for all of your beneficiaries. If you thought enough of them to put them in your Will, maybe you should also keep a phone number for them in a conspicuous place. Bank account information, and anything else you think would help someone reconstruct your asset and creditor picture are ideal things to put with these other documents, as well.
*Note that this will now be a category.
Most recently, I have been handling the probating of two estates. That statement is slightly inaccurate, however. For one estate (the wife's), I have only begun the process to determine whether probate will even be necessary. Despite what you may have heard, not all assets in an estate are subject to probate. However, it can often be difficult to figure which assets are and which are not. For example, the wife had an IRA and a 401(k), among her other assets. The IRA is not subject to probate, as she named her husband as a beneficiary. However, the 401(k) might be.
The 401(k) was administered by her employer. The company she worked for recently went out of business, and so I can no longer locate the plan administrator or any beneficiary designation forms. As such, I was forced to contact the U.S. Department of Labor and report the case. The agency will attempt to investigate and find my plan administrator, but they warn that it could take several months to do so, if they are able to find him at all. I also had to write a letter to the company managing the money and ask them what would be needed in the event we cannot find the beneficiary designation form. Hopefully, they will actually get back to me. The likelihood is that if a beneficiary designation form cannot be located, the proceeds from the 401(k) will be payable to the decedent's estate, and I will have to begin probate proceedings for her estate, at that point. Unfortunately, there is no way of knowing, and it is going to have the effect of delaying the full administration of both estates for several months.
This all could have been avoided if these people had kept all of their important documents together. Instead, they seemed to keep quite a bit of everything. The heirs are having trouble digging through the mounds of extraneous documents in the home and it is nearly impossible for them to discern what is important and what is just something that should have been thrown away years ago. As it is, the heirs barely found the Wills at all. If, however, these two had kept all their important documents together in one safe place, this could have all been averted. Important documents include: Wills, Trusts, Durable Powers of Attorney, Living Wills, Health-Care Surrogate Designations, insurance documents, beneficiary designation forms, current addresses and phone numbers for all of your beneficiaries. If you thought enough of them to put them in your Will, maybe you should also keep a phone number for them in a conspicuous place. Bank account information, and anything else you think would help someone reconstruct your asset and creditor picture are ideal things to put with these other documents, as well.
*Note that this will now be a category.
Wow.. sounds like you've got loads of work on your hands. And good to know I should keep the numbers of beneficiaries close... though I don't plan on dying anytime soon, I'll heed the advice. ;)
ReplyDeleteHave a good weekend! Perhaps you'll have some time to post... *cough*
ReplyDeletelol
Cheers! K