Pension Beneficiary?

[Tiny]

The HR department just sent me a nasty gram - cause I don't have a beneficiary on file for my pension - in the event of my untimely demise (ie before I am old enough to receive it).

This just forced me to face a whole can of worms.    I'm single - and have an old outdated will.   I've got a much more complicated financial life (and it seems I'm amassing wealth!!) than I did when the original will was set up (I did one of those DIY ones).

What kind of professional(s) do I need to talk to about figuring out how best to structure my beneficiaries (I've got an IRA, a Roth, a 401(k), and this pension thing = as well as 3 houses, and after tax accounts).     Would a lawyer be able to help me? or a Tax Accountant type person?   I don't really want to list of alot of names and % of benefit on all these things (neices/nephews/cats/charities...)

HELP!  Where do I start?
 

[justme]

I think you'd only need a will for the houses. The IRAs, 401(k)s, after tax accounts, and pension should all pass to the named beneficiary/beneficiaries without a problem and do not need to go through probate from what I know.

The cats would make it more complicated since I'd think you'd need to have a trust, and not sure about naming a charity the beneficiary of an IRA.

Start with figuring out who you want to get what, or rather what %/amount to each. So simple, right?  Then a lawyer probably would help parse it out right. I wouldn't think you'd need an accountant unless you are talking a huge estate where estate tax comes in.

[Rocky Mtn Saver]

I'm also single and faced the multiple beneficiary conundrum.  What I finally kinda decided on was I tallied up the rough values of my different accounts and parceled each account out to 1 or 2 beneficiaries, so that in the end it all ended up pretty evenly distributed dollar-wise.  I figure I'll rebalance on occasion as necessary due to growth, etc. 

[Tiny]

In all honesty the Cats won't be beneficiaries.

[Peace Of Mind]

I'm willing to help all you single people out with your problems.  PM me so I can give you my name, etc. 

Gosh - I'm such a giver!    

I have a will and simple trust for my kitty babies.  I have my SIL as head of the trust if DH and I both are killed.  But it all goes to the cats care and her for her efforts.  I'd have the Pension Beneficiary go to that trust or the estate if I were you guys.  

[Deleted]

@tiny Speck,

First do a little research and Google your state and "probate" and figure out how much those three houses are worth.

In CA, any estate that has real estate worth more than $35k has to go through probate UNLESS you place them in a Trust. You might want to take a look at Athena's thread on regular YM to read about the pros and cons of Trusts.

If you're likely to always have a pet (or two) you might think about whether it makes sense to set up a Pet Trust. We did because we're not sure that we will have any living relatives who could take them. Our attorney (and long time HS & College friend) is both the Trustee of our estate and the Pet Trust.

Bank accounts, IRAs and brokerage accounts can have just name beneficiaries and avoid probate.

You also might look up Estate Tax for your state. In our case, CA follows the fed rules. In my MIL's case the State of Oregon starts taxing estates in excess of $1M. Depending on what you find, you might want to explore if it makes sense to do some charitable giving to minimize any estate tax.

In general, I think the biggest decision to make is who is going to be your Trustee or Personal Representative. This should be a responsible, honest person who has enough common sense to settle your estate quickly and fairly.

[kittensaver]

Our lawyer gave us a kindly but stern lecture about NOT leaving money for the cats to inherit. He said they legally can't inherit anything and it would be a huge legal mess that would skim off $$ in fees to resolve. Rather, he said leave money for their care to someone (a designated friend, relative or rescue group) who agrees to take them in and keep them (and love them ) in the highly unlikely case of your untimely demise. Oh, and sweeten the pot with $$ for them too, for doing this.

If HR is breathing down your neck, just go with your first gut instinct and name a few beneficiaries. Seriously, name everyone (nieces, nephews, cat adopters, charities) "in equal shares." Beneficiaries are not forever; you can always go back and change them at any time after you've had the opportunity to think it over and plan with a tax or estate professional (unless you are in a community property state, then you need your spouse's written permission to name someone other than the spouse).

Good luck and just do it, and don't worry about it. You can change it later if you want to. 

[justme]

(unless you are in a community property state, then you need your spouse's written permission to name someone other than the spouse)

I don't live in a community property and the 401(k)/life insurance stuff I had to fill out for work had an item saying your spouse needs to sign if you are leaving it to anyone else.

[Tennesseer]

May 29, 2013 16:56:06 GMT -5 Peace Of Mind said:

I'm willing to help all you single people out with your problems.  PM me so I can give you my name, etc. 

Gosh - I'm such a giver!    

I have a will and simple trust for my kitty babies.  I have my SIL as head of the trust if DH and I both are killed.  But it all goes to the cats care and her for her efforts.  I'd have the Pension Beneficiary go to that trust or the estate if I were you guys.  

Meow!

[cronewitch]

I am the same way. My will leaves everything to mom, mom is 86 and doesn't want a mess. My ISO would be homeless and broke so I should leave him something. I put him on my ROTH so he could get about 250K. I put a niece and nephew on my 401K so they would get about 150K each.

I am trying not to die until I figure out what to do. I think buy a new house, set up a trust to hold the house. Give ISO a life tenancy in the house so he can live free. The trust could hold the investments and give off income so the trust could pay property taxes, insurance and repairs to keep the house nice. ISO will have about 3K a month from pensions and SS so he can buy food and stuff so with free rent he will be fine. When he dies the trust can sell the house and give all the money to my family. Since he is 65 it might be about 15 years before the estate was settled. The kids are 43 and 40 now so about right to fund their retirement. My little brother has liver damage so I don't think he will live 15 years but his wife might need some money she is 63 now. Maybe the trust could just give her income for life and the kids sell the house for money. Then they would get the trust money when their mom dies or I could leave some to the 17 year old great nephew or a special needs trust for his sister.

I like the idea of just not dying until I decide what to do.

[Deleted]

I like the idea of just not dying until I decide what to do.

POTD!  cronewitch

[Peace Of Mind]

May 29, 2013 17:26:40 GMT -5 Tennesseer said:

May 29, 2013 16:56:06 GMT -5 Peace Of Mind said:

I'm willing to help all you single people out with your problems.  PM me so I can give you my name, etc. 

Gosh - I'm such a giver!    

I have a will and simple trust for my kitty babies.  I have my SIL as head of the trust if DH and I both are killed.  But it all goes to the cats care and her for her efforts.  I'd have the Pension Beneficiary go to that trust or the estate if I were you guys.  

Meow!

<<pets the nice kitty>>  Do you need some food and a good home too?    

[Peace Of Mind]

  There are many benefits to being a slacker!   I'll share some with you when the time comes.  


My hussiness.  Not my money.  

[michelyn8]

When my children were younger and I did my will, my attorney advised me to name my estate as beneficiary for life insurance, 401k, etc.  My goal was to keep my ex from getting his grubby hands on my children's money and as minors, if I named them as direct beneficiaries, if he obtained custody (I had also requested my mother be named their guardian with the understanding that there was no guarantee the courts would uphold that request if ex fought it) he would have control of their money.  I would think you could do the same and then designate distrubtion of those funds in your will but its definately not something you should draft yourself.  A good trusts and estates lawyer should be able to guide you through this.

This reminds me that I really need to redo my will and living will now that all my children are adults and I have a grandchild.  And after seeing the mess DD1 had to deal with after her father's heart attack 2 weeks ago, I can really see the need for some kind of medical directive for who is to call the shots if I'm unable to.  Ex's parents divorced when he was a child and each remarried and had other children.  Former FIL and his part of the family were fine but former MIL and her brood were more emotional.  Her father's mother and brother really gave her a hard time in the beginning but fortunately, after a heart to heart with her other uncle from that "branch", he stepped up and set his part of the family straight.  I don't expect those kinds of issues with my family, but why chance it, right?

[NoNamePerson]

I have my son named beneficiary of IRA, DIL is secondary beneficiary - and I had to state that I was divorced on paper work. I have a will and it states that the home/vehicle that I own at time of death goes to him. He is on checking, etc accounts so that isn't a problem. Of course, I started simplying my stuff for my son when I hit 65. If he predeceases me I have left it all to my DIL.

If we should all go together at the same time, it is left to a Childrens Home where I grew up.

As for who to talk to about your situation, a lawyer is good but also talk to a qualified CPA and discuss the tax consequences of your request to others. No offense to lawyers but sometimes they have tunnel vision about wills and no idea what it will cost heirs.

[Deleted]

Our stuff is written so everything that's mine goes to hubby, everything that's his goes to me, and if we die together, it goes to any kids we have (we didn't have any at the time it was written, we do now!). If there are no kids, it's split evenly among the children of our brothers and sisters (we didn't name children's names in case any more come along). DH is the beneficiary on all of my stuff. Prior to DH, my beneficiaries were my dad, my stepmom and my ex DH (yeah, Im a sucker, we had a nice divorce, I figured I'd leave him a little if I didn't have anyone else).

[Wisconsin Beth]

My Mom's financial guy told her that her pension (maybe 457 and not pension, don't think we can inherit a pension if we're not a spouse) needs names, not just "the kids" to decrease the tax hit.  I have no idea if that's true to not.  But she dutifully listed all 5 of us as 2ndary beneficiaries. 

[Deleted]

Beth, that very well may be the case. Wonder if you can leave it to your estate and then distribute via your will? To be clear, mine are all set up to go to hubby. Not sure I have a secondary...my will is what is set up with unnamed kids. I assume, perhaps wrongly, that if my stuff goes to him and we both die, it will be distributed via his will (set up the same as mine) because it became his asset at the time I died.

[bean29]

OK, maybe I am slow this morning.  Bonnie what does POTD mean?

Those of you that have a pet trust, I am wondering how that works?  Does the pet continue to live in your home or does the pet go to live with a loving animal person who gets a "pet support" check every month?  If you are paying pet support how do you determine how much to pay monthly?  Just wondering.

On life insurance going to a trust - pretty sure that in most cases it is a no-no b/c life insurance passes tax free to the beneficiary but if it goes to a trust it becomes taxable.  So if you are trying to keep $ out of the hands of an ex - and that is the best way to ensure it fine, but otherwise, name you beneficiaries.

On Pension and life insurance beneficiaries in a community property state - I signed off for something like 30% of DH's life insurannce to go to his mother.  At the time there was a larger term policy that I was the benficiary on.  He cancelled that policy b/c it got too expensive.  Can I force him to change his beneficiary on his UL policy now?