What is a Beneficiary Form?

What is a Beneficiary Form?

March 24, 2021

By Melinda Gustafson Gervasi

Every day I work with clients to create or update an estate plan.  Over the years I have learned many things from my clients.  One of the standout lessons is that many people are fuzzy on what a beneficiary form is.  Beneficiary forms are a critical piece of an estate plan because they control the distribution of certain assets  Here are a few key concepts I share with clients when educating them about this area of estate planning:

• The forms tell your financial service company where those specific assets will go upon your death. 
• Normally you can list a primary beneficiary (or beneficiaries) as well as contingent(s).
• But for a few exceptions, the person(s) named on your beneficiary form will receive those funds no matter what your will or trust might say.
• Name the person(s) you intend for the assets to belong to on the form rather than a person who will "take care of handling the money".  The person on the form gets the asset and can do as they please with the asset.  If the person meant to "handle things" dies after receiving the funds, the asset will then pass according to his/her estate plan.
• Common financial assets that can be distributed using a beneficiary form include, but are not limited to:
• Life insurance
• Traditional or Roth IRAs
• 401k, 403b, etc.
• Pension plan
• Annuity 
• Brokerage account
• Digital content, funds or tools
• Do not trust your financial company to keep a record of your beneficiary form.  Companies lose them far too often (check future posts on this blog for my personal story on a Roth IRA of mine that all of a sudden had no beneficiary form). I recommend a screen shot, print out, or some hard copy proof showing your beneficiary designations for each account.

Now would be a wise time to take out the paperwork or pull up online the files related to your financial assets.  Ideally, you can avoid an estate planning stumble along with the facial expression of my dear husband, who does his best playing football with are very athletically inclined 12 year old son. 

Oh no! Image by M. Gustafson Gervasi 2021

Thanks for reading. Remember, a blog is not legal advice nor should it be taken as such.  Please seek legal advice from a licensed attorney in your state of residence for counsel on your specific situation.  This post is meant to spark thought and discussion.  It is not dispensing legal advice.    

What Is A Personal Representative?

What Is A Personal Representative?

By Melinda Gustafson Gervasi

March 17, 2021

Are you delving into writing your own will?  Chances are you might be struggling with some of the legal jargon associated with Estate Planning & Probate.  Take a short pause and educated yourself on the various legal terms to minimize confusion or misunderstanding when you draft a document.  Here are a few suggestions for deepening your knowledge of a key role in an estate plan, the Personal Representative

What is a Personal Representative:  This person is appointed by a court to administer the estate of a deceased individual.  In my home state of Wisconsin, the term Personal Representative is used.  However, other estates use the more familiar Executor or Executrix.  There are 50 different states in America.  Each has it's own laws governing estate planning and probate since the topic is a state's issue rather than a federal issue, such as immigration.  As a result, you need to determine what term is used in your state of residence.  Precision is key -- I have heard people refer to their "executive" or my personal favorite, their "executioner" -- both may cause a slight bit of confusion when a probate court reads that will.

Why it is important.  The Personal Representative's job is to handle the final affairs of the deceased.  This may include selling assets, filing income taxes, distributing personal and or digital property, paying bills of the deceased, and emptying the contents of the decedent's home.  The Personal Representative has a fiduciary responsibility to the estate's beneficiaries. Many people wonder if a will or trust would be the best vehicle to use in estate planning; they want what will be easiest on their loved ones.  Personally, who you name to handle your final affairs is far more important than what type of document you use.  If you nominate the wrong person, it will be a mess.

Who is an ideal candidate.  My suggestion when figuring out to name as your Personal Representative (or Executor) is to aim for Switzerland.  Who is neutral, precise, and efficient.  Many people assume their eldest child will be the natural selection.  Caution -- is that person well suited to handle financial matters, taxes, and family discussions?  Sometimes a party outside of the immediate family will decrease the chances of family drama occurring when the estate is being finalized.  Precision is key because in the end, a Final Accounting will be submitted to the court showing every penny that went into the estate (sale of home and car, bank accounts, interest earned, US saving bonds, refunds, etc.), and where every penny went (bills, mortgage, taxes, distribution to heirs, etc.). And by "every penny" I literally mean every penny.  Precision is key.  And last, who is efficient?  Here in Wisconsin the court system assumes a probate will open and close within 12 months.  That is not always the case if there are tax filing delays (which is common for 2020 and 2021 filings), and an extension can be granted.  Who can stay on top of the paperwork?  Who can tackle this job while grieving?  If you sit back and realize "no one" in my circle of family or friends meets this criteria, know you can look to an institution.  For example, the wealth management division at your bank or an accounting firm.

Image by M. Gustafson Gervasi 2021

It's never too early to nurture precise habits in the next generation.  To the left, my son working on his throwing aim.  Below, my daughter being precise on the figure skating ice. 

Image by M. Gustafson Gervasi 2021

Thank you for reading.  Remember, a blog is NOT legal advice.  Rather it is meant to spur thought and discussion.  Please consult a licensed attorney in your state of residence for advice on your specific situation.

What Makes a Good Estate Plan? Being Organized

What Makes a Good Estate Plan? Being Organized

By Melinda Gustafson Gervasi

March 12, 2021

What is that old saying, life happens suddenly on a Tuesday morning?  For me, life happened on a Friday morning earlier this month.  Settling down on our sofa with a hot cup of coffee and a new book, my plan was to start the day reading.  Then the phone rang.  Yes, an actual call.  "Husband" flashed across the screen.  

Me: "Hey, what's up?  Did you find your wallet?

Husband: "......Melinda?" came a dazed voice,  unlike my spouse's energetic way of speaking.

Me: "What's the matter?" came out of my mouth as my gut told me something was wrong.

Husband: "um, um,.....I fell off of my bike".  After 16 years together the call I dreaded had arrived.  I am married to a bike commuter, and year-round bike commuter.  The weather had just begun to warm up and he had returned to his 8 mile bike ride to work, using the recommended studded tires. 

Me: "Where are you, what's happened, do you need help?" 

Shifting into lawyer mode I asked a series of very pointed questions and determined that he needed to be picked up for medical attention.  I quick call to our primary care provider resulted in the directive of "head straight to the ER".  Once I had found him (he had been in the middle of a stretch of bike path not accessible via car) and we were at the hospital I learned what had happened in detail.  Biking slowly along the path keeping an eye out for his wallet he thought he'd dropped the night before, he made a left-hand turn onto a bridge and hit an invisible patch of ice. It was enough to send the rear tire flying into the air, tossing him up and off the bike, with him landing on the bike handle.  Abdominal trauma is taken seriously by the UW Hospital ER (thank goodness).  Due to COVID-19 restrictions I was not able to stay.  That afternoon he called saying they were keeping him overnight and asked for a bag with some personal items and clothing. "Oh, hey, the hospital also wants a copy of my power of attorney for health care, can you bring it?"  

In under 5 minutes I had a copy of his up-to-date power of attorney for health care in my hands and headed to the hospital along with the bag I had prepared.  Not knowing if emergency abdominal surgery was in his immediate future, I was quite shaky.  However, being able to put my hands on his POA gave me a small feeling of comfort.

We never know when life will throw us a curve ball.   Many things in life are out of our control.  Having an organized and up-to-date estate plan is under our control.  What works for our personal Estate Planning documents is a 3-ring binder with subject dividers.  Instead of saying English, Math and Science, this binder says: Powers of Attorney; Beneficiary Forms, Will; Financial Assets, etc.  When the call came I knew exactly where the binder was, flipped to the POA section, and pulled out a copy ready to be delivered to the hospital.

When organizing your documents, here are some broad topics your binder (of file cabinet, etc.) should address:

• Powers of Attorney, including extra copies to provide if requested.
• Contact information for key people in your life. For example, relatives, employer (or employees), pet sitter, accountant, child care provider or school.
• Disability and or Long-term care insurance coverage.
• Burial information.  For example, Wisconsin's Authorization for Final Disposition, contact for your place of worship, cemetery plot documents, and elements to include in your obituary. 
• Will and/or Trust.
• Complete listing of your financial assets with documentation/statement.  Examples include: deed to your home or other real estate holdings; life insurance, retirement accounts, brokerage accounts, banking services you use, Health Savings Accounts, Stocks, as well as a listing of creditors (credit cards, mortgage, auto loan, student loans, etc).
• Last years federal and state income tax filings.
• Listing of online accounts, such as: social media, email, rewards programs, and automatic billing for utilities, etc.
• Contact information for those who should know if you have passed away.  I include a copy of my most recent holiday card mailing list.

Image by M. Gustafon Gervasi 2019

Thank you for reading.  Please remember that a blog post is not legal advice.  Rather, it is meant to spark thought and discussion.  It is vital for you to consult with an attorney in your state of residence for advice on your specific situation.  Be well, stay safe!

What Does "Estate Planning" Mean?

What Does "Estate Planning" Mean?

By Melinda Gustafson Gervasi

March 3, 2021

Mystified may be the word many people opt to describe how they feel when they hear the phrase "Estate Planning".  For many the phrase evokes images of expensive lawyers sitting behind mahogany desks  serving clients with a seven-figure net worth.  When a person cannot insert themselves into that image, they dismiss "estate planning" for the wealthy and move on to the next item on their perpetual to-do lists.  Sadly, this is not true and learning the reality of estate planning can be a rude awakening when life reels up and places you or a loved one in the Emergency Room on a random Friday morning.  Estate planning is for everyone over age 18.

Estate planning boils down to three things, planning for: illness, death and taxes.  The documents that comprise your estate plan may look very different than  the plans of America's Top 2%, but they will address illness, death, and in some cases taxes.  An estate plan is basically a process by which you take control and make decisions about who has the authority to act (either if you are alive and too sick to act or at death) and where assets will pass upon your death.  These decisions must follow the laws of your state of residence.  Common types of documents that make-up an estate plan include: will, power of attorney for finance, power of attorney for health care, and in some cases a trust (of which there are dozens of different types).

The United States is comprised of 50 different states, and each has its own set of laws related to estate planning.  Terminology, requirements and responsibilities vary across state lines. It is essential you learn about the laws of your state and how they impact your situation.  Ideally a lawyer would assist you in that process.  A blog post is not a lawyer nor does it provide legal advice.  It is meant to get you thinking and talking about important topics.

Being overwhelmed by all that goes into an estate plan, many people are tempted to leave the project for another day.  I urge you to keep moving forward.  Start by educating yourself about the basics in your state.  Caution: many of those free lectures on how to avoid probate AND get a free fish diner are nothing more than scams run by sales people who are not licensed attorneys.  My personal preference is to find an attorney focused on the area of estate planning who also emphasizes education during your work together.

Thanks for reading.  If you are up for a video, you can view a recent Estate Planning 101 seminar I gave in a virtual format at the end of 2020.  It is educational, and does not provide legal advice.

Will Safekeeping - Dane County, Wisconsin

Will Safekeeping

Your Compass Series

By Melinda Gustafson Gervasi

February 22, 2021

Image by M. Gustafson Gervasi, 2021

Creating an estate plan is one thing, maintaining one is a completely different issue. Recent news stories indicate that fewer than 35% of Americans have an estate plan.  Entering this group deserves a pat on the back, well done!  If you can, muster the focus and energy to go further and to maintain your plan.  An estate plan that is out of date or cannot be found is not much of an estate plan. From that concept grew my new series, Your Compass, where I will explore what it means to manage your estate plan once the ink is dry.

Where is the dang will?  After fifteen years of working with estate planning and probate clients I can tell you a fact.  People lose their wills:

• accidentally shredded;
• misfiled and found years after it was needed;
• dementia takes the memory of where it was kept;
• it was packed with "important stuff" prior to the move, but cannot be found once settled in.

Not finding your will can result in not having a will -- courts may require an original.  So keep it safe!  But what is the best way?  Personally I find safe deposit boxes to be problematic.  Too often the document that says who can get into the box after your death is inside the box....and banks are growing more and more protective in efforts to secure their clients information.

Where does this attorney keep her will you may wonder?  Answer, it's on file with the Dane County Probate Court for Safekeeping.  There is a one-time $10 fee per will.  It is given a case number and filed for safekeeping in a space that has far superior fire and water protection than I could ever provide in my home.  Not a Dane County or Wisconsin resident?  Find out if your county courthouse offers a similar service, but make sure it is a quality service.  Not all court record systems are equal.

As for today, here is the process to file your will for safekeeping with the Dane County Probate Court:

• Your ORIGINAL WILL is filed with the court.  Making a copy of your will for your records is an excellent idea; stamp it COPY and note where the original is filed;
• Put the original will in a #10 business envelop with your name, address, and DOB printed very clearly on the front.  Seal the envelope;
• Create a self-addressed, stamped envelope to yourself.  This allows the court to mail you the receipt for placing your will for safekeeping.  Keep the receipt with your copy of the will and other estate planning documents;
• Call the court to confirm they are open and accepting will drop offs (for several months in 2020 the court was not open for this service) and that make sure the fee remains $10 (check).  The phone number is 608-266-4331.  It is located at 215 South Hamilton St., #1005 (to your left after you pass through security), Madison, 53703.

Thanks for reading!  Sign up for new blog posts alerts to stay on top of your estate plan.  Remember, a blog is not legal advice nor does it take the place of an attorney.  It is meant for thought and discussion.  Please consult a licensed attorney in our area for advice specific to your situation. 

At the Heart of Estate Planning: Where can you do the greatest good if tragedy strikes

 

At the Heart of Estate Planning: Where can you do the greatest good if tragedy strikes

By Melinda Gustafson Gervasi

February 5, 2021

Lawyers ask a lot of questions when counseling clients.  In my estate planning practice a typical sequence of questions when developing an estate plan sounds like this:

Me:  When you die, where do you want your probate assets to go?

Client:   To my spouse.

Me:  And what if your spouse has predeceased you?

Client:  Oh, well to my children equally.

Me:  And if a child had predeceased you, would his/her share go to any child(ren) he or she may have had.

Client.  Umm, well....yes, yes that makes sense.

Me:  Okay, this is the last one, but if the unthinkable happened and you had no surviving children or grandchildren, what would happen then?

Client:  Wow, I never thought of that before.

One of my favorite things about working with clients is when they surprise me and give me tools to use with other clients in the future.  Years ago I walked through the questions above with a client.  The clients was a medical professional with a spouse and four adult children.  The client, unfazed by my questions due to their scientific career and daily work with dying clients said, "well, if I am on a plane that is going down with my spouse and children I want something good to come from that tragedy".  The client then listed 4 nonprofits that would inherit in the unlikely, and unthinkable scenario.  The client felt the 4 organizations captured their families values and would have the most positive impact in the world.

Ever since, when a client gets to the "wow, I never thought about that" question I encourage them to think about where their money would do the greatest good and support their values.  Most need a few days to consider options, but using the structure of "where the money will do the greatest good" makes the thought process a bit more tolerable. 

Thank you for reading.  A blog post is meant to spark thought and discussion, but it is not legal advice.  Please consult with an attorney in your state of residence for legal advice specific to your situation.

Talking to Children About Death -- What I've Been Reading

Talking to Children About Death -- What I've Been Reading 

By Melinda Gustafson Gervasi

January 8, 2021

Grief during the current pandemic is unlike anything most of us have experienced during our lifetimes. Gathering, hugs, sharing a meal are not recommended. Instead Zoom Memorial Services or limited attendance at the grave site puts a twist on our grieving process. In the middle of it all, we are raising children. Inevitably the adults will need to talk about death and dying. This past year I was introduced to two different illustrated children's books that may smooth the path for discussing the path of a loved one with young children.

Badger's Parting Gifts by Susan Varley was introduced to me by the Rev. Kelly Crocker of the First Unitarian Society of Madison last Memorial Day weekend. Discussing death with children is never an easy duty, but it will be with us forever. In Badger's Parting Gifts the readers meet Badger, who is quite old, tired, and ready to go down the "long tunnel". After his passing, the woodland friends he left behind found comfort in the memories each had from an experience gift Badger had gave them during his life: how to tie a tie; how to bake gingerbread cookies; and how to ice skate. Badger's Parting Gifts also has a message for the adult reader -- the shared experiences you leave behind with young people will remain alive after your earthly presence has ended. The book is simple, straightforward, and secular.

More recently, I received an email from a northern Wisconsin librarian who suggested I read Home in the Woods by Eliza Wheeler. It is now part of our home library collection. Home in the Woods gives voice to a young child during the Great Depression who moves to a shack in the north woods of Wisconsin following her father's death. Based on a true story, the book is structured by the four seasons. With each passing season the child grows and heals from new experiences and the earth's renewal. This book may be helpful for a child who has experienced the death of a parent and subsequent changes in their life. I would have liked to see 2 or 3 more statements connecting the natural renewal depicted to the child's grief process. An added bonus to this book is the glimpse it offers into life during the Great Depression.

One of my "to-read" stacks of books.
M. Gustafson Gervasi, 2021