UPCOMING EVENTS

SEMINARS FOR SEPTEMBER 2017

MONROEVILLE
Tuesday, September 12, 2017
2:00PM
The Estate Planning Centers
3824 Northern Pike, Suite 801B
One Monroeville Center
Monroeville, PA 15146
Just west of Red Lobster on Rt. 22

MURRYSVLLE / DELMONT
Tuesday, September 12, 2017
7:00 PM
Holiday Inn Express
Delmont/Murrysville
6552 Route 22
Delmont, PA 15626
Behind Lamplighter Restaurant on Rt. 22

MURRYSVLLE / DELMONT
Thursday, September 14, 2017
2:00 PM
Holiday Inn Express
Delmont/Murrysville
6552 Route 22
Delmont, PA 15626
Behind Lamplighter Restaurant on Rt. 22

MONROEVILLE
Thursday, September 14, 2017
7:00 PM
The Estate Planning Centers
3824 Northern Pike, Suite 801B
One Monroeville Center
Monroeville, PA 15146
Just west of Red Lobster on Rt. 22

MONROEVILLE
Saturday, September 16, 2017
9:30 AM
The Estate Planning Centers
3824 Northern Pike, Suite 801B
One Monroeville Center
Monroeville, PA 15146
Just west of Red Lobster on Rt. 22

 
 

 
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Proudly serving clients throughout Allegheny, Westmoreland, Butler, Fayette, and Washington Counties; including Pittsburgh, Monroeville, Greensburg, Latrobe, Cranberry, Wexford, Sewickley and YOUR community.
Are Your Beneficiary Designations A Disaster?
 
For many families, life insurance and retirement accounts are the largest assets which pass to beneficiaries following a death. Despite this fact, people often don't pay much attention to the way beneficiaries are designated on these assets. This relaxed attitude can destroy an otherwise successful estate plan, because such "beneficiary designated" assets often do not pass under the terms of a Will or Trust. 
 
Someone may have spent a lot of time and money constructing a  written estate plan to govern the assets passing to beneficiaries, and providing protection for the beneficiaries under the written plan. When the names written in on a life insurance form or retirement account beneficiary designation aren't coordinated with the underlying plan, problems ensue. Just a few examples of problems we have seen include:
 
  • The worker who wasn't married when she was hired, and forgot to add her spouse or children as beneficiaries under her employer sponsored life insurance, resulting in the need to probate the benefit;
  • The husband who named his wife as the primary beneficiary on his 401k, and their two children as contingent beneficiaries, but forgot to update the form when they had a third child. The wife died first, and when the husband died, the third child was excluded from the benefit;
  • The well-meaning uncle who named his nephew with Down's Syndrome as a beneficiary of his life insurance, resulting in a loss of governmental benefits which the child was receiving unless the family completes an expensive court process to create a semi-effective trust to preserve the benefits;
  • The father who named his wife a 50% beneficiary of his life insurance, and each of his two young children 25% beneficiaries. The children were minors when their father died, and could not take title to assets. The mother had to hire an attorney to have the court appoint a guardian to oversee the children's money until they turn 18. The judge appointed a local attorney who will make all decisions until then (with annual fees charged for oversight, investment management and distribution decisions), and at age 18 the kids can do whatever they want with the money; and
  • The mother who named her oldest child as beneficiary of her IRA, "knowing" that he would "do the right thing" and share the money with his siblings.  You can guess what happened there.  Not only did her son want to keep the money, but further he was informed by his tax advisor that if he did give it to the others, he would get hit with income tax obligations and potential gift tax issues.
 
Beneficiary designation forms, while seemingly easy to complete, are very important. Properly considering your beneficiary designations is critical. Don't just throw names on the form, and do not take the advice of clerical staff at a financial institution. They often don't really know the ramifications of what they say. Talk to your attorney, and if necessary have the attorney help with completing the forms. Just because the form only gives you a line or two for beneficiaries doesn't mean you have to fit your information into that space. You can usually attach a separate letter of instruction if you need to be accurate and complete. 
 
Under no circumstances should you name a minor or a person with special needs as a beneficiary. These beneficiaries should have a trust, or at least a custodian under the Pennsylvania Uniform Gifts to Minors Act, therefore avoiding a court appointed guardian.  
 
Life insurance and retirement account assets are important and valuable. Give the process of setting up the beneficiary designations the respect and attention it deserves in order to see that your family gets the benefit of your hard work.